Credit and Punishment: Are Corporate Bankers Disciplined for Risk-Taking?

• 成果类型: Article
• 署名作者: Gao, Janet; Kleiner, Kristoph; Pacelli, Joseph
• 署名单位: Indiana University System; Indiana University Bloomington
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa046
• 发表日期: 2020
• 页码: 5706
• 关键词: Career concerns; incentive contracts; adverse selection; POOR PERFORMANCE; management; reputation; liquidity; finance; sales

摘要

We examine whether bankers face disciplining consequences for structuring poorly performing corporate loans. We construct a novel data set containing the employment histories and loan portfolios of a large sample of corporate bankers and find that corporate credit events (i.e., downgrades, defaults, bankruptcies) increase banker turnover. The effect is pronounced when bankers issue loans with loose terms or experience severe losses. Credit events prompt bankers to adopt stricter future risk management practices, such as offering restrictive covenant packages. Overall, our findings are consistent with banks disciplining employees as a means to manage their own risk exposure.