Bank Risk During the Financial Crisis: Do Business Models Matter?

Posted: 3 Feb 2012 Last revised: 6 Feb 2012

See all articles by Yener Altunbas

Yener Altunbas

University of Wales, Bangor

Simone Manganelli

European Central Bank (ECB)

David Marques-Ibanez

European Central Bank (ECB)

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2012

Abstract

We exploit the 2007-2009 financial crisis to analyze how risk relates to bank business models. Institutions with higher risk exposure had less capital, larger size, greater reliance on short-term market funding, and aggressive credit growth. Business models related to significantly reduced bank risk were characterized by a strong deposit base and greater income diversification. The effect of business models is non-linear: it has a different impact on riskier banks. Finally, it is difficult to establish in real time whether greater stock market capitalization involves real value creation or the accumulation of latent risk.

Keywords: bank risk, business models, bank regulation, financial crisis, Basle III

JEL Classification: G21, G15, E58, G32

Suggested Citation

Altunbas, Yener and Manganelli, Simone and Marques-Ibanez, David, Bank Risk During the Financial Crisis: Do Business Models Matter? (February 1, 2012). Bangor Business School Research Paper No. 12/003, Available at SSRN: https://ssrn.com/abstract=1998077

Yener Altunbas (Contact Author)

University of Wales, Bangor ( email )

Bangor, Wales LL57 2DG
United Kingdom

Simone Manganelli

European Central Bank (ECB) ( email )

Kaiserstrasse 29
Frankfurt am Main, 60311
Germany

HOME PAGE: http://www.simonemanganelli.org

David Marques-Ibanez

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
49 6913 44 6460 (Phone)
49 6913 44 6460 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
787
PlumX Metrics