..., they find diversification negatively affects bank performance; second, conservatism helps to dampen the negative effect of diversification; third, diversification did dampen the negative impact of the credit risk; fourth, banks exercise diversification when their efficiency is low but resulting in lower...

... that a bank can fail because people expect other related financial institutions to fail as well (self-fulfilling crisis). The study provides statistically significant evidence of the presence of credit risk spillovers in CDS markets. The findings show that equity market dynamics of “neighbouring” banks...