Do Labor Markets Discipline? Evidence from RMBS Bankers

62 Pages Posted: 1 Jun 2017 Last revised: 18 Jan 2018

John M. Griffin

University of Texas at Austin - Department of Finance

Samuel Kruger

University of Texas at Austin - Department of Finance

Gonzalo Maturana

Emory University - Goizueta Business School

Date Written: January 12, 2018

Abstract

This paper examines whether employees involved in RMBS securitization experienced internal and external labor market consequences relative to similar non-RMBS employees in the same banks, and why. Senior RMBS bankers experienced similar levels of job retention, promotion, and external job market opportunities. Even signers of RMBS deals with high loss and misreporting rates, or deals implicated in lawsuits experienced no adverse internal or external labor market outcomes. These findings are likely not explained by targeted or delayed employee discipline, small legal fines, or protection due to pending litigation, but are consistent with implicit upper-management approval of RMBS activities.

Keywords: RMBS fraud, labor market discipline, financial crisis

JEL Classification: G24, G28, J44, K42

Suggested Citation

Griffin, John M. and Kruger, Samuel and Maturana, Gonzalo, Do Labor Markets Discipline? Evidence from RMBS Bankers (January 12, 2018). Available at SSRN: https://ssrn.com/abstract=2977741 or http://dx.doi.org/10.2139/ssrn.2977741

John M. Griffin (Contact Author)

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-6621 (Phone)

HOME PAGE: http://www.jgriffin.info

Samuel Kruger

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

Gonzalo Maturana

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

HOME PAGE: http://www.gonzalomaturana.com/

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