(BHC) assets across U.S. metropolitan statistical areas (MSAs) on BHC risk. We find that the geographic expansion of bank … assets reduces risk. Moreover, geographic expansion reduces risk more when BHCs expand into economically dissimilar MSAs, i … quality. Our results are consistent with arguments that geographic expansion lowers risk by reducing exposure to idiosyncratic …

foreign-owned - tended to be heavy risk takers. Most of them had excessive credit growth. - Laeven uses a linear programming … requires assessing both efficiency and risk factors, so Laeven also introduces a measure of risk taking. This risk measure … helps predict which banks were restructured after the crisis of 1997. Laeven finds that foreign-owned banks took little risk …

risk-taking. We study this issue in a model of leveraged financial intermediaries that endogenously choose the riskiness of … and higher risk. However, if the capital structure is fixed, the effect depends on the degree of leverage: following a … policy rate cut, well capitalized banks increase risk, while highly levered banks decrease it. Further, the capitalization …

We provide a theoretical foundation for the claim that prolonged periods of easy monetary conditions increase bank risk … taking. The net effect of a monetary policy change on bank monitoring (an inverse measure of risk taking) depends on the … balance of three forces: interest rate pass-through, risk shifting, and leverage. When banks can adjust their capital …

This paper proposes a theoretically sound and easy-to-implement way to measure the systemic risk of financial … institutions using publicly available accounting and stock market data. The measure models credit risk of banks as a put option on …-sector losses from systemic default risk as the value of a put option written on a portfolio of aggregate bank assets whose exercise …