Skip to Main content Skip to Navigation
Journal articles

Bank income structure and risk: An empirical analysis of European banks

Abstract : The purpose of this paper is to investigate the relationship between bank risk and product diversification in the changing structure of the European banking industry. Based on a broad set of European banks for the period 1996-2002, our study first shows that banks expanding into non-interest income activities present higher risk and higher insolvency risk than banks which mainly supply loans. However, considering size effects and splitting non-interest activities into both trading activities and commission and fee activities we show that the positive link with risk is mostly accurate for small banks and essentially driven by commission and fee activities. A higher share of trading activities is never associated with higher risk and for small banks it implies, in some cases, lower asset and default risks. JEL classification: G21
Document type :
Journal articles
Complete list of metadata

Cited literature [29 references]  Display  Hide  Download
Contributor : Clovis Rugemintwari Connect in order to contact the contributor
Submitted on : Tuesday, December 30, 2014 - 11:23:32 AM
Last modification on : Tuesday, February 22, 2022 - 9:00:02 AM
Long-term archiving on: : Tuesday, March 31, 2015 - 10:11:55 AM


Files produced by the author(s)




Laetitia Lepetit, Emmanuelle Nys, Philippe Rous, Amine Tarazi. Bank income structure and risk: An empirical analysis of European banks. Journal of Banking and Finance, Elsevier, 2008, 32, pp.1452 - 1467. ⟨10.1016/j.jbankfin.2007.12.002⟩. ⟨hal-01098960⟩



Record views


Files downloads