Historical Patterns and Recent Changes in the Relationship between Bank Holding Company Size and Risk

[...]This article investigates the relationshipbetween asset size and risk at bank holding companiesfrom 1987 to 1993.1 We find that for most of thisperiod, the level of risk at large bank holding companiesdid not differ significantly from that at small bankholding companies. However, we do find some significantdifferences in the nature of that risk. Although theadvantage of size has allowed larger institutions todiversify their risk, differences in activities and leveragehave counterbalanced this diversification advantage,leaving large bank holding companies with no less riskthan small companies throughout most of the periodthat we examine.[...]