Crisis contracts

DOI10.1007/S00199-019-01204-9MaRDI QIDQ1996121zbMATH OpenOpenAlexFDO

Authors Elias Aptus, Volker Britz, Hans Gersbach

Publication date 3 March 2021

Published in Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/s00199-019-01204-9

zbMATH Keywords

bankers' paybanking crisescapital requirementscrisis contractsexcessive risk takinghedging

Mathematics Subject Classification ID

Applications of game theory (91A80) Contract theory (moral hazard, adverse selection) (91B41) Financial networks (including contagion, systemic risk, regulation) (91G45)

Recommendations

• Commitment contracts
• Crisis and risk dependencies
• Contracts made manifest
• Contracts made manifest
• Framing contingencies in contracts
• Dynamic contracting: accidents lead to nonlinear contracts
• Costly Contract Contingencies

Cites work

• Bank capital, fire sales, and the social value of deposits
• Bank Regulation, CEO Compensation, and Boards
• Chaotic banking crises and regulations
• Executive compensation and risk taking
• Fair management of social risk
• Liaisons dangereuses: increasing connectivity, risk sharing, and systemic risk
• On Watts' cascade model with random link weights
• Public trust and government betrayal
• Social rationality, separability, and equity under uncertainty

Cited in

(5)

• Efficient ex-ante stabilization of firms
• Looting and risk shifting in banking crises
• Market financing of bail-out targets
• Why did sponsor banks rescue their SIVs? A signaling model of rescues
• Risk management under a prudential policy

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