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 …

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 …

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

adverse selection and moral hazard problems leading to higher bank risk. The revenue diversification channel suggests that as …We show that bank risk rises, particularly for larger banks and those with greater interest-sensitive liabilities …, during times of economic policy uncertainty through two economic channels: ‘credit rationing’ and ‘revenue diversification …

risk factors, we separate the bank-specific selection and monitoring abilities from the composition of the loan portfolio …, on average, lower loan losses, (b) the loss rate of a given industry in a bank's loan portfolio is lower if the bank has …

This paper studies how a bank's diversification affects its own risk taking behavior and the risk taking of competing … diversification of banks changes a bank's lending behavior and market interest rates, which also has ramifications for nondiversified … strategies, I further pin down a causal relationship between the diversification of competitors and a bank's risk taking behavior …

This paper analyzes the effects of bank manager’s incentive pay on financial stability. Two banks are owned by risk …-neutral principals and run by risk-averse managers that determine the level of leverage and how much to diversify into the other bank …’s asset. Diversification and leverage in turn determine both idiosyncratic and systemic insolvency risk. We first characterize …

This study examines the infuence of US banks' revenue diversification on profitability, equity capital, and credit risk … by size. By a simple decomposition of Return On Capital (ROC) I show how popular revenue diversification measures affect … diversification measures on profitability, equity capital, and credit risk both in comparative statics and dynamically along the …

This study examines the influence of US banks' revenue diversification on their profitability, equity capital, and … credit risk, by size. By a simple decomposition of Return On Capital (ROC) I show how popular revenue diversification … techniques. I find substantial differences between size groups concerning the impact of revenue diversification measures on …

link between Pakistan’s Revenue Diversification and banking efficiency over the period 2008 to 2019. Their banking … diversification on banking efficiency in the second portion of the investigation. As a consequence, the findings revealed that it has … a significant influence on bank technical efficiency. Other efficiency drivers have a significant impact on the bank …