Is Capping Executive Bonuses Useful is popular PDF and ePub book, written by Kentaro Asai in 2016-09-29, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Is Capping Executive Bonuses Useful can be Read Online from any device for your convenience.
Is Capping Executive Bonuses Useful Book PDF Summary
This paper develops a theoretical framework to study the impact of bonus caps on banks’ risk taking. In the model, labor market price adjustments can offset the direct effects of bonus caps. The calibrated model suggests that bonus caps are only effective when bank executives’ mobility is restricted. It also suggests, irrespective of the degree of labor market mobility, bonus caps simultaneously reduce risk shifting by bank executives (too much risk taking because of limited liability), but aggravate underinvestment (bank executives foregoing risky but productive projects). Hence, the welfare effects of bonus caps critically depend on initial conditions, including the relative importance of risk shifting versus underinvestment.
Detail Book of Is Capping Executive Bonuses Useful PDF
- Author : Kentaro Asai
- Release : 29 September 2016
- Publisher : International Monetary Fund
- ISBN : 9781475543261
- Genre : Business & Economics
- Total Page : 37 pages
- Language : English
- PDF File Size : 14,7 Mb
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