Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153828
Authors: 
Altunbas, Yener
Marqués-Ibáñez, David
Manganelli, Simone
Year of Publication: 
2011
Series/Report no.: 
ECB Working Paper 1394
Abstract: 
We exploit the 2007-2009 financial crisis to analyze how risk relates to bank business models. Institutions with higher risk exposure had less capital, larger size, greater reliance on short-term market funding, and aggressive credit growth. Business models related to significantly reduced bank risk were characterized by a strong deposit base and greater income diversification. The effect of business models is non-linear: it has a different impact on riskier banks. Finally, it is difficult to establish in real time whether greater stock market capitalization involves real value creation or the accumulation of latent risk.
Subjects: 
Bank Regulation
bank risk
Basle III
business models
financial crisis
JEL: 
G21
G15
E58
G32
Document Type: 
Working Paper

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