Acharya, Viral V.; Hasan, Iftekhar; Saunders, Anthony - Federal Reserve Bank of Chicago - 2002
We study empirically the effect of focus (specialization) vs. diversification on the return and the risk of banks using … deterioration in bank monitoring quality at high levels of risk and a deterioration in bank monitoring quality upon lending … high risk banks, sectoral loan diversification produces an inefficient risk–return tradeoff only for high risk banks, and …
