We examine whether features of bank executives' compensation contracts cause them to take actions that contribute to systemic risk. Using multiple return-based measures of systemic risk coupled with an identification strategy that exploits heteroskedasticity to account for endogenous matching of...

Employing a novel control function regression method that accounts for the endogenous matching of banks and executives, we find that equity portfolio vega, the sensitivity of executives' equity portfolio value to their firms' stock return volatility, leads to systemic risk that manifests during...

This study tests whether disclosing a trader's identity dampens or stimulates subsequent trading volume based on the trader's reputation for being informed. While a reputation for being informed makes markets less liquid, thus inhibiting subsequent trade ("illiquidity effect"), the information...