Are two heads better than one? Evidence from the thrift crisis

► Thrifts led by CEO-Chairs were more likely to survive the thrift crisis. ► Thrift led by CEO-Chairs maintained more conservative lending policies. ► Taxpayers become residual claimants when risky lending policies end in failure. ► Manager-dominated thrifts resist shareholder pressure to exploit deposit insurance. ► Regulations requiring the separation of the CEO and chair posts may be imprudent.