from overlaps in banks' portfolios. Portfolio diversification is used as a strategy to mitigate losses from investments in … risky projects. We calculate an optimal level of diversification that has to be reached for a given level of excessive … leverage to still mitigate an increase in systemic risk. In our model, this optimal diversification further depends on the …

from overlaps in banks' portfolios. Portfolio diversification is used as a strategy to mitigate losses from investments in … risky projects. We calculate an optimal level of diversification that has to be reached for a given level of excessive … leverage to still mitigate an increase in systemic risk. In our model, this optimal diversification further depends on the …

. This paper investigates whether diversification influences banks' investment (credit) policy and profitability. Diversified … banks appear to benefit from “coinsurance,” supply more credit, and seem more profitable. However, diversification does not … diversification may impact banks' credit supply and therefore the real economy …