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The Role of Complexity for Bank Risk during the Financial Crisis: Evidence from a Novel Dataset

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  • Krause, Thomas
  • Sondershaus, Talina
  • Tonzer, Lena

Abstract

We construct a novel dataset to measure banks' complexity and relate it to banks' riskiness. The sample covers stock listed Euro area banks from 2007 to 2014. Bank stability is significantly affected by complexity, whereas the direction of the effect differs across complexity measures. This heterogeneity advises against the use of a single complexity measure when evaluating the implications of bank complexity.

Suggested Citation

  • Krause, Thomas & Sondershaus, Talina & Tonzer, Lena, 2016. "The Role of Complexity for Bank Risk during the Financial Crisis: Evidence from a Novel Dataset," IWH Discussion Papers 17/2016, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-17-16
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    References listed on IDEAS

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    Cited by:

    1. Elizaveta Kamaraeva, 2020. "Bank Complexity and Risk," Russian Journal of Money and Finance, Bank of Russia, vol. 79(3), pages 75-104, September.

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    More about this item

    Keywords

    bank risk; complexity; globalization;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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