Banking crises are recurrent phenomena, often induced by ex-ante excessive bank risk-taking, which may be due to … behavioral reasons (over-optimistic banks neglecting risks) and to agency problems between bank shareholders with debt … related to bank insiders' sale of their own bank shares in the period prior to 2006:Q2 (the peak and reversal in real estate …

financial firms engage in excessive risk-taking mainly through increased leverage. Third, we find that bank corporate governance …

Traditional theory suggests that higher bank profitability (or franchise value) dissuades bank risk-taking. We … highlight an opposite effect: higher profitability loosens bank borrowing constraints. This enables profitable banks to take … risk on a larger scale, inducing risk-taking. This effect is more pronounced when bank leverage constraints are looser, or …