The equilibrium model between the financial risk and the efficiency for diversified financial operation: An example of financial conglomerates model

摘要

Diversified financial operation has its advantages such as the economics of scale, economics of scope and X-efficiency. Meanwhile, it also causes complex special financial risks. When the cost of the integration and supervision equals the incremental non-risk return and risk premium return, the financial conglomerates achieve the equilibrium of the minimum of the risk and the maximum of the profit.