Analysis of the Relationship Between Bank Risk, Diversification, and Group Network Density

• Main Authors: Lun-Chi Yuan, 袁倫淇
• Other Authors: 趙莊敏
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/w494wt

碩士 === 國立臺北科技大學 === 商業自動化與管理研究所 === 96 === This study investigates whether the activities of diversification conducted by banks influence their risk taking. But not only banks or finance institute take diversification activities, the business conglomerates which combine a bank and nonblank firms do so. With the viewpoint of corporate governance, we further analyze the impact of group network density between a bank and its related corporates. We use z-score value to be the bank’s bankruptcy risk proxy, and analyze earnings volatility with Total Leverage Framework method. We find that fee-based activities revenue proportion is positive related to both higher revenue volatility and higher total leverage, which in this framework implies higher earnings volatility and does not reduce bank’s bankruptcy probability. Group network density is also positive related to bank’s bankruptcy probability.