Preparing for the Next Financial Crisis

Incentives 75

asset management companies, whereby banks’ impaired assets are purchased by a

government agency, contribute to the risk eect the most. The GFC seemingly

did not overturn those results:

− Mariathasan etal. (2014) study a panel of 781 banks from 90 countries over

the period 2001–2013 and show that banks perceived as more likely to ben-

et from government support tend to be more leveraged, more weakly cap-

italized, more heavily invested in risky assets and exposed to more severe

liquidity mismatch, and also made heavier losses during the crisis.

− Hoque etal. (2015) use data on 378 banks over the period 2007–2011 to study

the impact of bank loan regulation on their risk- taking. They nd that capital

regulations and privat ...