We build a moral hazard model to study incentives of financial intermediaries (shortly, bankers) facing a leverage-insurance …, like those of insurance companies and pension funds (ICPFs), which allocate capital to bankers to reach for yield and meet … improving the resiliency of the regulated banking sector, create room for bank disintermediation and do not unambiguously limit …

risk. Using the U.S. life insurance industry as a laboratory, we present a model in which variable annuity (VA) guarantees …