Conventional wisdom in banking argues that diversification tends to reduce bank risk and improve performance, but the recent financial crisis suggests that aggressive diversification strategies may have resulted in increased risk taking and poor performance. This paper addresses this important...

This paper examines the debt structure of a sample of U.S. firms exposed to climate risks. Climate risks, categorized as physical, regulatory, and transition risks are associated with greater debt specialization for the affected firms. We find physical and regulatory risks, propagating through...