study, we investigate the impact of cross-industry loan diversification on bank systemic risk using data from listed banks … diversification strategy aimed at reducing individual bank systemic risk is a significant topic in both theory and practice. In this … diversification on bank systemic risk operates primarily through the channel of interbank asset similarity. Additionally, we find the'diversification …

widespread bank insolvency. The banks and investors share a common belief about the future value of certain long-term assets, but …We explore a model of the interaction between banks and outside investors in which the ability of banks to issue inside … belief shocks induce banks to buy risky assets from investors, and the banks finance those purchases by issuing new short …

European supervisors aggressively requested more capital at large banks. That may cut credit to the economy. We confirm … that especially larger banks cut loans while less-significant banks partly offset that credit drop. Moreover, we identify … nasty spillovers from that interaction. Specifically, larger banks’ deleveraging was associated with significant portfolio …