. 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 …

In this paper, we study the implications of diversification in the asset portfolios of banks for financial stability … both the level of diversification, and the connectivity and structure of the financial network. In contrast to earlier … studies we find that diversification at the level of individual banks may be beneficial for financial stability even if it …

We check if the level of capital buffers influences the quality of bank diversification strategies. We use consolidated … diversification exerted non-monotonic impacts on bank robustness during and after the GFC. Capital buffers preserved the robustness of … less diversified BHCs in times of crisis. Well-capitalized BHCs adopted less prudent diversification strategies amid the …

Advocates of diversifying bank income sources often argue that diversification improves the resilience of banks during … periods of distress. To test this proposition, we analyze the impact of income diversification on the performance of Italian … financial crisis. By contrast, diversification across broad activity classes, such as lending and capital market activities, did …