We study empirically the effect of focus (specialization) versus diversification on the return and the risk of banks … loan diversification produces an inefficient risk–return trade-off only for high-risk banks. Geographical diversification …) focus and diversification using a unique data set that is able to identify individual bank loan exposures to different …

financial development has important consequences for the efficiency and specialization (or diversification) of investments, in a …

that financial development has important consequences for efficiency and specialization (or diversification) of investments …

assess and price the risk of default. In order to analyse default risk in the macroeconomy, a simple general equilibrium … model with banks and financial intermediation is constructed in which default-risk can be priced. It is shown how the credit … spread can be attributed largely to the risk of default and how excess loan creation may emerge due different attitudes to …

The paper studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk … assets. We show that this undermines the traditional result that higher capital reduces excess risk-taking driven by limited … liability. Moreover, higher capital may have an unintended e¤ect of enabling banks to take more tail risk without the fear of …

the labour market for traders intensifies, banks optimally offer top traders contracts inducing them to take more risk … to reduced risk-taking by their top traders. …

their loan portfolio, public disclosure reduces the probability of banking crises. When asset risk is driven largely by …This paper analyses the impact of public disclosure of banks’ risk exposure on banks’ risk taking incentives and its … implications in terms of soundness of the banking system. We find that, when banks have a complete control over the volatility of …

This paper studies the impact of competition on the determination of interest rates, and on banks’ risk taking … lower entry costs foster competition in deposit rates and reduce banks’ incentives to limit risk exposure. While higher … insurance coverage amplifies this effect, two alternative arrangements (risk based contributions to the deposit insurance fund …

, and regulations that can be put in place to reduce moral hazard induced by implicit guarantees to the banking sector. …