Journal of
Italian
Banking
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year 100
 

Forum | Papers » Internationalization, diversification and risk in multinational banks

Internationalization, diversification and risk in multinational banks

Mohamed Azzim Gulamhussen, Carlos Pinheiro, Alberto Franco Pozzolo
November 2012 - n°11
Jel codes: G34, G21, G15, L22, F23, F36

Since the beginning of the financial crisis, multinational banks have been accused of being among the major causes of the financial system’s destabilization. But the available empirical evidence on the relationship between international diversification, value creation and riskiness of financial intermediaries does not provide a unique answer. In this paper we analyze such relationship on a sample of over 500 banks from 56 countries in the seven years before the beginning of the financial crisis. Our evidence shows a positive and statistically significant effect of international diversification on both value and riskiness

 

 

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