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2015
- ISIDORE Id: 10670/1.2c44ac...
- hal: hal-04141415
info:eu-repo/semantics/OpenAccess
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Michael Brei et al., « The universal bank model: Synergy or vulnerability? », HAL SHS (Sciences de l’Homme et de la Société), ID : 10670/1.2c44ac...
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Résumé
In this paper we examine empirically the relationship between banks’ income diversification, expansion into non-traditional activities and performance. Using detailed information on the U.S. banking sector over the period 2002-12, we investigate whether or not banks’ involvement in various business lines has been associated with higher accounting returns and risks. Over the long-term, we find robust evidence that banks’ expansion into non-traditional activities has lacked revenue and diversification benefits: overall risks of non-traditional banks have been higher, while returns were not. A higher degree of diversification across traditional and certain non-traditional activities, on the contrary, has been associated with important risk reduction benefits. The effects are non-linear and differ across business lines, which seems to suggest that an optimal mix of banking activities exists.
