We build a moral hazard model to study incentives of financial intermediaries (shortly, bankers) facing a leverage-insurance …, like those of insurance companies and pension funds (ICPFs), which allocate capital to bankers to reach for yield and meet … improving the resiliency of the regulated banking sector, create room for bank disintermediation and do not unambiguously limit …

Through the compulsory participation of junior investors in bearing losses of their failing bank, the bailin attempts … to limit bail-outs' side-effects in terms of market discipline, too-big-to-fail, bank-sovereign nexus and risk …-in effects on bank resilience appear mixed. While it incentivises banks to reduce risk-taking (e.g., increasing risk …