Gropp, R.; Grundl, C.; Guttler, A. - Tilburg University, Center for Economic Research - 2010
In 2001, government guarantees for savings banks in Germany were removed following a law suit. We use this natural … experiment to examine the effect of government guarantees on bank risk taking, using a large data set of matched bank … (monitoring), after the removal of public guarantees. Public guarantees seem to be associated with substantial moral hazard …