Executive Compensation in Imperfect Financial Markets

Research output: Book/ReportBookpeer-review


The recent financial crisis and associated real estate bubble demonstrated the damage that can be caused by imperfect financial market pricing. On the basis of these imperfections, strong financial returns earned by financial institutions in the run-up to 2008 were, in fact, illusory.
Executive Compensation in Imperfect Financial Markets explores the relationship between bank lending, real estate markets and stock market prices. Offering a heterodox view of financial market pricing and its relationship with executive pay, this book offers a competing interpretation of the recent crisis, which emphasizes the role of bank leverage and investor expectations in generating instability - particularly through the interaction of financial institutions with the real estate market. In the process, it reveals that equity-based compensation incentivized increased bank leverage, which was a cardinal cause of the crisis.
Original languageEnglish
PublisherEdward Elgar Publishing Ltd.
Number of pages264
ISBN (Print)9781782549284
Publication statusPublished - Oct 2014

Publication series

NameElgar Financial Law


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