Analysis of approaches to the relationship between risk and bank diversification
The proceedings of 3rd Business Doctoral and Emerging Scholars Conference
Edith Cowan University - School of Business and Law
School of Business and Law / Markets and Services Research Centre (MASRC)
This study explores the relationship between bank diversification and risk in order to synthesize different approaches to this research issue. The study develops a three-way classification approach to the analysis of the impact of bank diversification on risk. This includes the impact of bank-level diversification on bank-level risk, the impact of bank-level risk on systemic risk, and a syndicated approach to systemic risk. By comparing these approaches, a research gap is identified and a future empirical study on the relationship between bank diversification and risk, which takes into account systemic and contagion effects, is proposed.