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- W2160084943 abstract "We analyze the interplay of capital requirements and mandatory deferral of compensation in reducing banks’ risk taking incentives. Two heterogenous banks fund uncorrelated projects with fully diversifiable risk or correlated projects with systematic risk. One of both banks can identify project types and is superior at managing risks. If projects are in abundant supply, full mandatory deferral of compensation is optimal as it allows a larger banking sector without increasing the default risk. With limited supply of projects, deferred compensation may misallocate risky projects to the bank that is inferior at managing risks, so that early compensation may be optimal." @default.
- W2160084943 created "2016-06-24" @default.
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- W2160084943 date "2018-03-23" @default.
- W2160084943 modified "2023-09-24" @default.
- W2160084943 title "Bank capital requirements and mandatory deferral of compensation" @default.
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- W2160084943 doi "https://doi.org/10.1007/s11149-018-9352-3" @default.
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