Banking Diversification, Information Sharing and Bank Risk Taking: International Evidence

• Main Authors: Yu-chen Chang, 張妤甄
• Other Authors: Kun-Li Lin
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/50078463578764978980

碩士 === 逢甲大學 === 財務金融學所 === 99 === This study investigates whether bank asset/income diversification influences bank risk taking and we further to consider in different degree of national development and market structure. In addition, we analyze whether information sharing affects the impact of relationship between bank diversification and bank risk. Using Bankscope database covering 2955 commercial banks in 75 countries for the period 2002-2009, we find the following findings. We find that there is a diversification discount: In Developed countries with the low concentration of the market, banks diversify assets and income can significantly reduce the bank’s asset, capital and insolvency risk . Also, in developing countries with the low concentration of the market have the same results. On the contrary, the developed and developing countries with the high concentration of the market, bank income diversification can increase the bank risk., which led to diversification discount. After considering information sharing, we find some results about the relationship of diversification and bank risk. In developed countries with the high concentration of market, information sharing can increase the effect of diversification reducing bank risk. However, in developed countries with the low concentration of the market, information sharing can’t affect the impact of diversification on bank risk. Finally, in developing countries, information sharing seems to have no positive effect, especially, in the low concentration of the market even have result of reverse effect.