Bank activity and funding strategies the impact on risk and returns
"This paper examines the implications of bank activity and short-term funding strategies for bank risk and returns using an international sample of 1,334 banks in 101 countries leading up to the 2007 financial crisis. Expansion into non-interest income generating activities such as trading incr...
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| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
[Washington, D.C]
World Bank
2009
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| Schriftenreihe: | Policy research working paper
4837 |
| Schlagworte: | |
| Online-Zugang: | kostenfrei |
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| Zusammenfassung: | "This paper examines the implications of bank activity and short-term funding strategies for bank risk and returns using an international sample of 1,334 banks in 101 countries leading up to the 2007 financial crisis. Expansion into non-interest income generating activities such as trading increases the rate of return on assets, and it may offer some risk diversification benefits at very low levels. Non-deposit, wholesale funding, by contrast, lowers the rate of return on assets, although it can offer some risk reduction at commonly observed low levels of non-deposit funding. A sizeable proportion of banks, however, attract most of their short-term funding in the form of non-deposits at a cost of enhanced bank fragility. Overall, banking strategies that rely prominently on generating non-interest income or attracting non-deposit funding are very risky, which is consistent with the demise of the U.S. investment banking sector. "--World Bank web site |
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| Beschreibung: | Includes bibliographical references. - Title from PDF file as viewed on 5/8/2009 |
| Beschreibung: | 1 Online-Ressource |
| DOI: | 10.1596/1813-9450-4837 |