Danielsson, Jon 
ORCID: 0009-0006-9844-7960, Jorgensen, Bjorn N. and de Vries, Casper G.
(2002)
Incentives for effective risk management.
Journal of Banking and Finance, 26 (7).
pp. 1407-1425.
ISSN 0378-4266
Abstract
Under the new Capital Accord, banks choose between two different types of risk management systems, the standard or the internal rating based approach. The paper considers how a bank's preference for a risk management system is affected by the presence of supervision by bank regulators. The model uses a principal–agent setting between a bank's owner and its risk management. The main conclusion is that previously unregulated institutions can be expected to switch to the lower quality standard approach subsequent to becoming regulated, i.e., the presence of regulation may induce a bank to decrease the quality of its risk management system.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.journals.elsevier.com/journal-of-bankin... |
| Additional Information: | © 2002 Elsevier Science B.V. |
| Divisions: | Accounting Finance Financial Markets Group |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management |
| JEL classification: | G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation |
| Date Deposited: | 20 Oct 2008 10:28 |
| Last Modified: | 11 Dec 2024 22:29 |
| URI: | http://eprints.lse.ac.uk/id/eprint/18231 |
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