“…The first stream of literature focuses on financial institutions' characteristics, including their size (Saunders et al, 1990;Laeven and Levine, 2009;Afonso et al, 2014), liquidity (Diamond and Dybvig, 2000;Diamond and Rajan, 2012), diversification of funding activities (Demirgüç-Kunt and Huizinga, 2009), bank capital as a share of risk-weighted credit exposures (Furlong and Keely, 1989), and corporate governance (Agoraki et al, 2010;Chen et al, 2017). The second stream of literature focuses on the determinants of risktaking that results from external sources, such the degree of bank competition (Boyd and De Nicolò, 2005;Beck et al, 2006;Beck et al, 2013), monetary policy (Borio and Zhu, 2012;Chen et al, 2017), deposit insurance schemes (Demirgüç-Kunt and Detragiache, 2002;Angkinand and Wihlborg, 2010), external regulation (Barth et al, 2004;Klomp and De Haan, 2012) such as creditor and minority shareholder protection (La Porta et al, 2000;Houston et al, 2010), and political institutions (Chen et al, 2015;Ashraf, 2017;Wang and Sui, 2019).…”