kaal:claim:2061166-010

Reliance on public bail-outs, unaccompanied by any threat that management, shareholders and creditors would share significant losses, created an asymmetric incentive for excessive risk taking by financial institutions.

The reliance on a public bail-out without the threat of any significant losses shared by management, shareholders and creditors may have created an asymmetric incentive for excessive risk taking by financial institutions.

Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012), 3. The German Banking Reorganization Act of 2010, p. 33
https://ssrn.com/abstract=2061166 · source PDF

Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166

• Germany and the United States during the height of the financial crisis
• where insolvency was not a credible threat

mechanismsupport: arguedfailure: Bail-out expectation removes the loss threat and skews risk incentivesfamily: moral-hazard-and-bailout-expectationrisk-and-incentivessystemic-risk

The quote above is an exact substring of the source PDF, whose sha256 is 43625ea260d0fc045e86d3435df50c9d0ca4abf8542e6085a6165be6653b4a7b. Extraction method: pdf-text-layer.
Attestation record: colloquium/attestations/16447c0b31861935...json
Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/2061166-010.md | sha256sum