This paper models incentives for risk-taking by managers of banks or securitization deals. Of particular interest are risk-retention rules for producers of structured securitization deals, which have been mandated by the Dodd-Frank Act; the model can also be applied to bank managers. We show how...

This study explores whether and how bank characteristics affect general risk-taking and tail risk of Too-Big-to-Fail (TBTF) and non-TBTF banks differently. We show that TBTF banks’ investment decisions drive their risks, while sources of funding drive risks of other banks. Contradicting the...