the context of banks diversifying into the other bank's asset, which may potentially intensify a systemic risk. The … central results of the paper are as follows. When creditors punish the bank's excessive risk exposure by demanding higher risk … premium, the bank owners' optimal diversification will coincide with the diversification that maximizes the combined value of …

geographic complexity can engender explicit trade-offs between the agency problems that increase risk and the diversification …, liquidity management, and synergy improvements that reduce risk. The outcomes of such trade-offs may depend on bank governance … this type of complexity, leading to a decrease in systemic risk and an increase in liquidity risk among BHCs. While bank …