Failure in bank corporate governance has been seen as a contributing factor to excessive risk-taking pre-crisis with …, this paper presents novel findings on drivers for risk-taking and crisis performance. Specifically, I find a positive … shareholders induce managers to take risk where the safety net creates incentives for risk-shifting to debt holders and taxpayers …

selling activity before the 2008 short ban reflected financial companies’ risk exposures in the subprime crisis. The evidence … suggests that short sellers sold short stocks that had the greatest asset and insolvency risk exposures, and that the short … disciplining effects of investors and may also serve as a counterweight to any perceived macro or systemic risk reduction benefits …

deferrals reduce risk-taking. However, the banker's optimal risk-taking also depends on the costs of risk-taking. We calibrate …, whereas capping the bonus at the level of the base salary substantially reduces the bankers’ risk-taking. Our results suggest … that the European Union's bonus cap reduces risk-taking whereas bonus clawbacks as prescribed in the Dodd-Frank Act appear …

justified. We model bonuses as a series of sequential call options on profits and show that they provide higher risk … no robust relationship between risk-taking incentives and US banks' stock returns during the global financial crisis. The …

1990s crisis with the most recent distribution demonstrates the greatly elevated risk level prior to the 1990s crisis. …