Specialized banks in Germany see lower loan losses and higher industry exposures.
The article examines how focusing on specific industries in their loan portfolios affects German banks' credit risk. By analyzing data from 2003-2011, the researchers found that banks specializing in certain industries tend to have lower loan losses. They also discovered that banks with major exposures to a particular industry experience lower loss rates for that industry. Additionally, banks with more focused portfolios have lower variability in their loan losses.