المؤلفون: Gietl, Daniel

مصطلحات موضوعية: ddc:330, H20, H30, G28, G41, Overconfidence, Bailouts, Banking Regulation, Bonus Taxes

الوصف: Empirical evidence suggests that managerial overconfidence and government guarantees contribute substantially to excessive risk-taking in the banking industry. This paper incorporates managerial overconfidence and limited bank liability into a principal-agent model, where the bank manager unobservably chooses effort and risk. An overconfident manager overestimates the returns to effort and risk. We find that managerial overconfidence necessitates an intervention into banker pay. This is due to the bank's exploitation of the manager's overvaluation of bonuses, which causes excessive risk-taking in equilibrium. Moreover, we show that the optimal bonus tax rises in overconfidence, if risk-shifting incentives are sufficiently large. Finally, the model indicates that overconfident managers are more likely to be found in banks with large government guarantees, low bonus taxes, and lax capital requirements.

العلاقة: Series: Discussion Paper; No. 132; gbv-ppn:1066686564; http://hdl.handle.net/10419/194028Test; RePEc:rco:dpaper:132

الإتاحة: http://hdl.handle.net/10419/194028Test

المؤلفون: Gietl, Daniel, Haufler, Andreas

مصطلحات موضوعية: ddc:330, H20, H87, G28, bonus taxes, international tax competition, migration

الوصف: We analyze the competition in bonus taxation when banks compensate their managers by means of fixed and incentive pay and bankers are internationally mobile. Banks choose bonus payments that induce excessive managerial risk-taking to maximize their private benefits of existing government bailout guarantees. In this setting the international competition in bonus taxes may feature a \'race to the bottom\' or a \'race to the top\', depending on whether bankers are a source of net positive tax revenue or inflict net fiscal losses on taxpayers as a result of incentive pay. A \'race to the top\' becomes more likely when governments\' impose only lax capital requirements on banks, whereas a \'race to the bottom\' is more likely when bank losses are partly collectivized in a banking union.

العلاقة: Series: Discussion Paper; No. 34; gbv-ppn:895137356; http://hdl.handle.net/10419/185704Test; RePEc:rco:dpaper:34

الإتاحة: http://hdl.handle.net/10419/185704Test

المؤلفون: Gietl, Daniel, Haufler, Andreas

مصطلحات موضوعية: ddc:330, H20, H87, G28, bonus taxes, international tax competiton, migration

الوصف: We analyze the competition in bonus taxation when banks compensate their managers by means of fixed and incentive pay and bankers are internationally mobile. Banks choose bonus payments that induce excessive managerial risk-taking to maximize their private benefits of existing government bailout guarantees. In this setting the international competition in bonus taxes may feature a ‘race to the bottom’ or a ‘race to the top’, depending on whether bankers are a source of net positive tax revenue or inflict net fiscal losses on taxpayers as a result of incentive pay. A ‘race to the top’ becomes more likely when governments’ impose only lax capital requirements on banks, whereas a ‘race to the bottom’ is more likely when bank losses are partly collectivized in a banking union.

العلاقة: Series: CESifo Working Paper; No. 6495; gbv-ppn:88991642X; http://hdl.handle.net/10419/167481Test; RePec:ces:ceswps:_6495

الإتاحة: http://hdl.handle.net/10419/167481Test