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 …

We present a model where bank assets are a portfolio of risky debt claims and analyze stockholders' risk … increase prevails through a second channel: an increase in risk shifting. (3) Risk shifting decreases with the diversification …-taking behavior while considering the strategic interaction between debtors and creditors. We find that: (1) as the leverage of a bank …

changes in the diversification nature of banks activities. We analyzed the financial statements of (13) Jordanian banks on …) to measure the diversification degree of revenue, credit, and deposits activities.The study concluded that (a) stock … market has evaluated the changes in revenue diversification more efficiently than changes in the structure of credit or …

Rather than taking on more risk, US insurers hit hard by the crisis pulled back from risk taking, relative to insurers … hit less hard by the crisis. Capital requirements alone do not explain this risk reduction: insurers hit hard reduced risk … within assets with identical regulatory treatment. State level US insurance regulation makes it unlikely this risk reduction …

adverse selection and moral hazard problems leading to higher bank risk. The revenue diversification channel suggests that as …We show that bank risk rises, particularly for larger banks and those with greater interest-sensitive liabilities … exacerbating bank risk …