Working Paper

Portfolio risks and bank asset choice


Abstract: An investigation of the effects of credit risk and interest-rate risk on bank portfolio choices, showing how bank capital inadequacy may prevent a bank from investing in the optimal portfolio and how the efficiency of the bank's intermediation technology affects its choice of second-best portfolio.

Keywords: Bank investments; Risk;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 1989

Number: 8913