U.S. banks have increasingly diversified into activities traditionally considered as non-core for the banking sector …. This paper investigates whether diversification influences banks' investment (credit) policy and profitability. Diversified … banks appear to benefit from “coinsurance,” supply more credit, and seem more profitable. However, diversification does not …

This paper examines the quality of credit ratings assigned to banks in Europe and the United States by the three …, and define a new ordinal metric of rating error based on banks' expected default frequencies. Our results suggest that … rating agencies assign more positive ratings to large banks and to those institutions more likely to provide the rating …

We develop a methodology to measure the capital shortfall of commercial banks in a market downturn, which we call … that reflect the banks' market-sensitive assets. We measure SEL as the difference between the mark-to-market value of the … assets in the downturn and the book value of the liabilities. Based on large U.S. commercial banks, we empirically …

In this paper, we examine the relationship between banks lobbying activities, their size, financial strength, and … sources of income. First, we find that banks are more likely to lobby when they are larger, have more vulnerable balance … sheets, are less creditworthy, and have more diversified business profiles. We also find that banks engaged in non …