kaal:claim:1998455-018

Regular corporate governance controls may not work in systemically important financial institutions, because those institutions are considered too big to fail and their leaders, anticipating a bailout commitment, are incentivized to shift their risk preferences upwards.

the regular corporate governance controls may not work in SIFIs. SIFIs are often considered too big to fail and may be bailed out. If that is the case, SIFI leaders may anticipate a bail-out com- mitment and may be incentivized to shift their risk preferences upwards.

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012), IV.A. Adverse Effects, p. 34
https://ssrn.com/abstract=1998455 · source PDF

Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455

• where the institution is treated as too big to fail and a bailout is anticipated

failuresupport: arguedfailure: governance-controls-ineffective-in-sifisfamily: moral-hazard-and-bailout-expectationgovernance-designcorporate-governancesystemic-riskrisk-and-incentives

• restates kaal:claim:1908473-014 The incentive effects of corporate governance controls may not operate in systemically important financial ins...

The quote above is an exact substring of the source PDF, whose sha256 is 1c16ff10a284469ba15fb7ba5523449b917388ee692d9b394f9e8c094544e32c. Extraction method: pdf-text-layer.
Attestation record: colloquium/attestations/1d4f73dce6ac4895...json
Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/1998455-018.md | sha256sum