How Banks with Leaders Experienced in Past Crises Fared in Global Financial Crisis

Regulators and policymakers have asserted that the public was “blindsided” by the “perfect storm” that caused the 2007-2009 global financial crisis (GFC, e.g., Financial Crisis Inquiry Commission [FCIC] 2011; Appelbaum 2015). Academic research has similarly found that market participants, including bank CEOs, generally did not recognize the severity of the crisis or respond effectively (e.g., Fahlenbrach and Stulz 2011; Desai, Rajgopal, and Yu 2016). As the FCIC concluded, “[the] greatest tragedy would be to accept the refrain that no one could have seen [the GFC] coming…If we accept this notion, it will happen again” (2011). These concerns are particularly salient … Read more