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Journal of Business Ethics

Erschienen in:

31.03.2016

Managerial Risk-Taking Behavior: A Too-Big-To-Fail Story

verfasst von: Asghar Zardkoohi, Eugene Kang, Donald Fraser, Albert A. Cannella

Erschienen in: Journal of Business Ethics | Ausgabe 1/2018

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Abstract

We examine the implications of the US government’s too-big-to-fail (TBTF) policy as it has been applied to banks. Using alternative measures of risk, we compare the risk-taking behavior of 11 TBTF banks, identified by the Comptroller of the Currency in 1984, to a number of non-TBTF banks. We provide both theory and new empirical evidence to support our argument that the TBTF policy leads management to significantly increase risk-taking, with no corresponding increase in performance. While prior studies have considered the effects of the TBTF policy on limited, but risk-related aspects of bank behavior, such as the cost of funds, our study provides direct evidence about the risk-taking behavior associated with the TBTF policy. Our study has important implications for the current political debate regarding the too-big-to-fail policy.

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Titel: Managerial Risk-Taking Behavior: A Too-Big-To-Fail Story
verfasst von: Asghar Zardkoohi
Eugene Kang
Donald Fraser
Albert A. Cannella
Publikationsdatum: 31.03.2016
Verlag: Springer Netherlands
Erschienen in: Journal of Business Ethics / Ausgabe 1/2018
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI: https://doi.org/10.1007/s10551-016-3133-7

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