We develop a conceptual framework that links executive compensation incentives to the external risks and returns generated by the firm but borne by society. Recent advances in measuring liquidity creation (Berger and Bouwman, 2009) and systemic risk (Acharya, et al. forthcoming) allow us to...

We test whether and how U.S. commercial banks actively managed their liquidity positions between 1992 and 2012, prior to the implementation of the Basel III liquidity rules. On average, the data are consistent with a liquidity management regime in which banks targeted the traditional...

We address two key issues concerning bank bailout effects on depositor and bank behavior. The first is whether bailouts weaken or strengthen market discipline by depositors through deposit supplies. The second is if bailed-out banks decrease or increase their deposit demands. These questions can...