The Stock Market and Bank Risk-Taking

• 成果类型: Article; Early Access
• 署名作者: Falato, Antonio; Scharfstein, David
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; Harvard University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13502
• 发表日期: 2025
• 关键词: executive-compensation; management; BEHAVIOR; long

摘要

Using confidential supervisory risk ratings, we document that banks increase risk after going public compared to a control group of banks that filed to go public but withdrew their filings for plausibly exogenous reasons. The increase in risk improves short-term performance at the expense of long-term performance. We argue that the increase in risk stems from pressure to maximize short-term stock prices and earnings once the bank is publicly traded. After going public, banks owned by investors that place greater value on short-term performance increase risk more, and those managed by CEOs with more short-term compensation also increase risk more.