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 …