The Risk Spiral: The Effects of Bank Capital and Diversification on Risk Taking


We present a model where bank assets are a portfolio of risky debt claims and analyze equityholders' risk-taking behavior while considering the strategic interaction between debtors and creditors. We find that: (1) as the... [ view full abstract ]


  1. Alon Raviv (Bar Ilan University)
  2. Sharon Peleg (Tel Aviv University)

Topic Areas

Game Theory , Options , Risk Management


FR-A-B1 » Risk Spirals (10:00 - Friday, 20th July, Beckett 1)

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