Individual and systematic risk in the Danish banking sector: A trade-off?

Victoria Zugrav, Johannes Kabderian Dreyer, Peter A. Schmid

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This article discusses the relationship between bank risk and the overall stability of the financial system in the aftermath of the last global financial crisis of 2007. In order to measure the effects of different bank characteristics to individual and systematic risk, we collect panel data for the Danish banking sector from 2000 to 2015. Using financial data on 21 Danish banks accounting for 88% of total market share in Denmark, we reflect upon the contribution of these different variables to systematic risk. Our results suggest that variables such as size, leverage, noninterest income, tier 1 capital ratio, depository funding and organizational complexity are key variables on determining financial risk. However, particularly for the Danish case, bank size has different effects on individual and systematic risk: a negative effect on the former and a positive on the latter variables.
Original languageEnglish
Publication date2017
Publication statusPublished - 2017
Event16th International Conference on Finance and Banking: Rethinking Risk in Financial Markets and Institutions - Hotel Mercure, Ostrava, Czech Republic
Duration: 11 Oct 201712 Oct 2017
Conference number: 16


Conference16th International Conference on Finance and Banking
LocationHotel Mercure
CountryCzech Republic
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