Bank Bailouts and Moral Hazard: Evidence from Germany

• 成果类型: Article
• 署名作者: Dam, Lammertjan; Koetter, Michael
• 署名单位: University of Groningen
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhs056
• 发表日期: 2012
• 页码: 2343
• 关键词: deposit insurance; RISK; too; governance; STABILITY; failures

摘要

We use a structural econometric model to provide empirical evidence that safety nets in the banking industry lead to additional risk taking. To identify the moral hazard effect of bailout expectations on bank risk, we exploit the fact that regional political factors explain bank bailouts but not bank risk. The sample includes all observed capital preservation measures and distressed exits in the German banking industry during 1995-2006. A change of bailout expectations by two standard deviations increases the probability of official distress from 6.6% to 9.4%, which is economically significant.