The equity of too-big-to-fail banks could be deemed less risky due to implicit government guarantees. However, such guarantees could also amplify a moral hazard problem that induces large banks to take excessive risk. If such risk is mispriced by the market due to the increased complexity of...

Although risk culture is a key element in the risk management process, identifying the riskculture of a firm can be challenging due to the abstract concept of culture. We introduce textmining and unsupervised machine learning algorithms to define the risk culture for U.S. bankholding companies...