Imperial College London

Professor Franklin Allen

Business School

Executive Director of the Brevan Howard Centre
 
 
 
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Contact

 

+44 (0)20 7594 9195f.allen Website CV

 
 
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Location

 

2.05B52-53 Prince's GateSouth Kensington Campus

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Summary

 

Publications

Citation

BibTex format

@article{Allen:2015:jfr/fju003,
author = {Allen, F and Carletti, E and Goldstein, I and Leonello, A},
doi = {jfr/fju003},
journal = {Journal of Financial Regulation},
pages = {30--50},
title = {Moral Hazard and Government Guarantees in the Banking Industry},
url = {http://dx.doi.org/10.1093/jfr/fju003},
volume = {1},
year = {2015}
}

RIS format (EndNote, RefMan)

TY  - JOUR
AB - The massive use of public funds in the financial sector and the large costs for taxpayers are often used to justify the idea that public intervention should be limited. This conclusion is based on the idea that government guarantees always induce financial institutions to take excessive risk. In this article, we challenge this conventional view and argue that it relies on some specific assumptions made in the existing literature on government guarantees and on a number of modelling choices. We review the theory of government guarantees by highlighting and discussing the role that these underlying assumptions play in the assessment of the desirability and effectiveness of government guarantees and propose a new framework for thinking about them.
AU - Allen,F
AU - Carletti,E
AU - Goldstein,I
AU - Leonello,A
DO - jfr/fju003
EP - 50
PY - 2015///
SN - 2053-4833
SP - 30
TI - Moral Hazard and Government Guarantees in the Banking Industry
T2 - Journal of Financial Regulation
UR - http://dx.doi.org/10.1093/jfr/fju003
VL - 1
ER -