This paper contributes to the empirical literature on risk shifting. It proposes a method to find out whether risk shifting is present in the banking industry and, if so, what type. The type of risk shifting depends on the group of debt holders to whom risk is shifted. We apply this method to...

This paper empirically analyzes risk shifting in the banking industry. Specifically, we study whether risk shifting took place in the European Union's banking sector in 2002–2009. Taking into account the components of the financial structure of banks, we also identify the type of risk...

This paper analyzes the relation between bank profit performance and business models. To assess the profitability of bank business models, we propose a new approach based on machine learning. In particular, we identify bank business models using balance sheet components’ contributions to...

Previous work suggests that the charter value hypothesis is theoretically grounded and empirically supported, but not universally. Accordingly, this paper aims to perform an analysis of the relations among charter value, risk taking, and supervision that take into account the relations'...

We propose a spatial competition model to study banks' strategic responses to the asymmetric Spanish geographic deregulation process. We find that once the geographic deregulation process finishes, inter-regional mergers between savings banks are optimal whenever the economies of scale...

Recent cross-country comparisons of bank efficiency have been based on pooled estimates of banks across countries and have typically assumed a common frontier and that differences in performance among banks are primarily due to disparities in certain country-specific aspects of banking...

Recent cross-country comparisons of bank efficiency have been based on pooled estimates of banks across countries and have typically assumed a common frontier and that differences in performance among banks are primarily due to disparities in certain country-specific aspects of banking...

This paper assesses and tests the response of banks operating in the financial centres to the financial crisis in terms of the actual productivity change and its main components: the pure efficiency change, scale efficiency change and technological change (innovation). The heterogeneity in the...

Diversified and focused business models may affect foreign bank efficiency differently in branches or subsidiaries. We investigate whether there is a unique optimal business model in three dimensions: assets, funding and income. We apply recently developed bootstrap methods to estimate group...

The U.S. banking industry has been characterized by intense merger activity in the absence of economies of scale and scope. We claim that the loosening of geographic constraints on U.S. banks is responsible for this consolidation process, irrespective of value-maximizing motives. We demonstrate...