Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/193576
Authors: 
Kirti, Divya
Year of Publication: 
2018
Series/Report no.: 
ESRB Working Paper Series 69
Abstract: 
Rather than taking on more risk, US insurers hit hard by the crisis pulled back from risk taking, relative to insurers hit less hard by the crisis. Capital requirements alone do not explain this risk reduction: insurers hit hard reduced risk within assets with identical regulatory treatment. State level US insurance regulation makes it unlikely this risk reduction was driven by moral suasion. Other financial institutions also reduce risk after large shocks: the same approach applied to banks yields similar results. My results suggest that, at least in some circumstances, franchise value can dominate, making gambling for resurrection too risky.
Subjects: 
Life insurance
banking
risk shifting
franchise value
financial frictions
JEL: 
G22
G21
G32
G28
Persistent Identifier of the first edition: 
ISBN: 
978-92-9472-021-4
Document Type: 
Working Paper
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