Motivation of financial institutions’ management to a crisis

Ács, Attila: Motivation of financial institutions’ management to a crisis. Proceedings of the "Scientific Management" and Management Science Today International Scientific Conference. pp. 20-27. (2011)

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Abstract

The recent financial and economic crisis highlighted the importance to better understand managers’ motivation and decision making process at financial institutions. There is direct relation between liquidity developments and asset price movements and these market developments influence the decision makers’ attitude and reaction. This interconnection can result in a vicious circle with devastating consequences for the financial system and real economy. Nowadays market-based institutions overtook the dominant role in the supply of credit from commercial banks. These market-based financial institutions were deeply involved in securitisation and actively used capital and financial markets to satisfy their funding needs. This changing nature of finance is well reflected by the aggregate balance sheet of marketbased financial intermediaries which in 2007 reached 17.000 trillion of dollars compared to commercial banks 13.000 trillion. This overwhelming role of broker-dealers, investment banks together with their risk and investment practices explains why the managerial decisions in this type of financial institutions have reaching consequences to the whole financial system and real economy. Main goal is to shed light on this management behavioural phenomenon on which today’s researchers and practitioners need to focus on to prevent the proliferation of overly risk taking.

Item Type: Article
Journal or Publication Title: Proceedings of the "Scientific Management" and Management Science Today International Scientific Conference
Date: 2011
Page Range: pp. 20-27
ISBN: 978-963-306-176-3
Uncontrolled Keywords: Pénzügy
Additional Information: Bibliogr.: p. 26-27. ; összefoglalás angol nyelven
Date Deposited: 2019. May. 15. 12:36
Last Modified: 2019. May. 15. 12:36
URI: http://acta.bibl.u-szeged.hu/id/eprint/57878

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