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Inside Debt and Enterprise-Wide Bank Risk Sjoerd van Bekkum. Discussion by Patrick Verwijmeren Conference “Corporate governance of financial institutions”. Summary. Conclusion. Inside debt reduces realized bank risk Overall assessment: Highly relevant topic
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Inside Debt and Enterprise-Wide Bank RiskSjoerd van Bekkum Discussion by Patrick Verwijmeren Conference “Corporate governance of financial institutions”
Conclusion • Inside debt reduces realized bank risk Overall assessment: • Highly relevant topic • Part of a stream of new literature • Paper has many nice features
Comments • Is the focus on risk or performance? • Stress that this is an example in which risk turned out to be value destroying
Comments • When focusing on performance: Think about the quality of the manager • Endogeneity: executive age • When focusing on risk: Did top managers even know they were taking huge risks? • How representative is this period?
Is this a good paper? • Yes: relevant topic, careful analysis, nicely written • Explain a bit more why studying realized risk is a useful addition to studying expected risk • High informational asymmetry?