Traditional theory suggests that higher bank profitability (or franchise value) dissuades bank risk-taking. We … risk on a larger scale, inducing risk-taking. This effect is more pronounced when bank leverage constraints are looser, or … notable cross-sectional patterns of bank risk-taking in the run-up to the 2008 crisis …

We apply text analysis to Twitter messages in Spanish to build a sentiment- based risk index for the financial sector … captures the impact of sources of financial stress not explicitly encompassed in quantitative risk measures. Finally, we show … that a shock in our Twitter sentiment index correlates positively with an increase in financial market risk, stock market …