Government bailouts of systemically important financial institutions create strong incentives for those institutions to externalize the cost of their risk taking onto taxpayers.
Source quote, verbatim
Government bailouts create strong incentives to externalize the cost of SIFIs' risk taking onto taxpayers.
From
Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012), I. Introduction, p. 4 https://ssrn.com/abstract=1998455 · source PDF
Cite as
Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455
Holds when
where governments provide bailout funding to systemically important financial institutions
extendskaal:claim:1806252-013 Because banks expect to be bailed out with taxpayer funds, they may have less incentive to monitor their hedge...
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