Bank risk shifting and diversification in an emerging market
Jonathan Batten () and
Xuan Vinh Vo
Risk Management, 2016, vol. 18, issue 4, 217-235
Abstract This paper investigates risk shifting in commercial banks in the emerging market of Vietnam, where banks fund domestic asset portfolios almost exclusively from deposits and with limited issuance of securities. We investigate the relationship between these banks’ income diversification strategies and their overall level of risk during the recent period of deregulation and global financial crisis. Our results show that those commercial banks that have shifted to non-interest income activities in fact face higher levels of risk. This finding is at odds with theories that argue that diversification is a strategy for risk reduction and has broader implications for domestic system stability. The analysis provides a framework for evaluating these issues in other emerging markets.
Keywords: bank risk; interest income; non-interest expense; diversification; non-interest income; Vietnam (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1057/s41283-016-0008-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pal:risman:v:18:y:2016:i:4:d:10.1057_s41283-016-0008-2
Ordering information: This journal article can be ordered from
Access Statistics for this article
Risk Management is currently edited by Igor Loncarski
More articles in Risk Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla ().