Institutional Diversity and Bank Stability

Are banks more stable when the surrounding banking system is more institutionally diverse? In a post adapted from their paper, “Institutional Diversity in Domestic Banking Sectors and Bank Stability: A Cross-Country Study,” Christopher F. Baum, a Professor of Economics and Social Work and Chair of the Economics Department at Boston College, and co-authors Caterina Forti Grazzini and Dorothea Schäfer, provide the first quantitative evidence on the link between institutional diversity and bank stability in the Great Financial Crisis. The FinReg Blog