This paper examines the impact of business diversification of banks on their risk, with efficiency taken into … find that increased business diversification exerts two competing effects on bank risk, and overall reduces bank risk. The … arguments on the diversification-efficiency nexus in banking — the “diversification-premium” argument vs. the “diversification …

income diversification and market concentration are related to bank stability. Firstly, we document that bank stability is … concentration modifies the link between revenue diversification and bank stability. Specifically, it is shown that diversified banks … robust to multiple regression specifications with different proxies for bank stability and income diversification. …

liberalised economies assess diversification attempts of listed public banks. We find that the income diversification has a …, the relationship observed between diversification and markets' assessment of value and risk is non-linear. Relative to …

The paper focuses on the interaction between the solvency probability of a banking firm and the diversification … achieve a confidence level for solvency, we demonstrate that diversification reduces the amount of equity. Notably, the VaR …

Bank holding companies (BHCs) can be complex organizations, conducting multiple lines of business through many distinct … legal entities and across a range of geographies. While such complexity raises the costs of bank resolution when … geographic complexity can engender explicit trade-offs between the agency problems that increase risk and the diversification …

The paper examines how loan portfolio diversification drives bank returns, mainly focusing on the conditioning roles of … increased sectoral loan portfolio diversification reduces bank returns, but not all banks are equally affected. Banks that … adopted a business model towards non-interest activities are hurt less from loan portfolio diversification, and bank market …

We present a model where bank assets are a portfolio of risky debt claims and analyze stockholders' risk …-taking behavior while considering the strategic interaction between debtors and creditors. We find that: (1) as the leverage of a bank … demonstrates that an increase in comovement of a loan portfolio increases the bank's cost of default directly, we find that the …

dampening of non-dominant banks' capacity for monopoly pricing. Empirical findings demonstrate that diversification across …

Modern portfolio theory claims that diversification into non-correlated or negatively correlated activities reduces the … overall risk of a portfolio. Considering the total income of a bank as a portfolio of interest income and non-interest income …