If a bank might be too-big-to-fail, then shareholders' optimal compensation contract encourages the executive to risk-shift on to the taxpayer. Standard risk-reducing regulatory compensation rules -- deferred pay, equity-linked pay, debt-like instruments in pay -- do not fully correct for...

We study the impact of ring-fencing on bank risk using short-term repo rates. Exploiting confidential data on the near-universe of sterling-denominated repo transactions, we find compelling evidence that banking groups subject to ring-fencing are perceived to be safer; repo investors lend to...

We study the impact of ring-fencing on bank risk using short-term repo rates. Exploiting confidential data on the near-universe of sterling-denominated repo transactions, we find compelling evidence that banking groups subject to ring-fencing are perceived to be safer; repo investors lend to...