Template-type: ReDIF-Article 1.0
Author-Name: Elizaveta Kamaraeva
Author-Email: elizabeth.kamaraeva@yandex.ru
Author-Workplace-Name: International College of Economics and Finance, National Research University Higher School of Economics
Title: Bank Complexity and Risk
Abstract: The consolidation of banks into banking groups and holdings has been a prominent recent trend in Russia's banking sector. To evaluate the effect of consolidation on the risk of a banking group, one needs a specific metric that captures organisational, business, and geographic complexity. In this paper, I consider different complexity types and proxies, and examine how complexity affects the risk of a banking group. Using data for 76 banking groups in Russia for 2015-2019, I find that for most of the complexity indicators there is a positive relationship between the organisational and business complexity on the one hand, and the risk of a banking group on the other hand. I also show that, in combination, different types of complexity have a positive effect on risk.
Classification-JEL: G21, G32
Keywords: bank complexity, risk taking, regulation, banking group, agency problem, diversification, Z-score
Journal: Russian Journal of Money and Finance
Pages: 75-104
Volume: 79
Issue: 3
Year: 2020
Month: September
DOI: 10.31477/rjmf.202003.75
File-URL: https://rjmf.econs.online/upload/iblock/6fa/Bank_Complexity_Risk.pdf
Handle: RePEc:bkr:journl:v:79:y:2020:i:3:p:75-104