TAF PUBLISHING

In this study, the relationship between balance sheet items in terms of credit risk and market risk is tried to be measured by panel data analysis. The banking sector is one of the leading sectors in a country's economy. The fact that banks are financially sound ensures their sustainability on the one hand and a sustainable profit level on the other. This study investigates whether the diversification of banks' asset items has a financial impact on the risk level. In this context, panel data analysis was conducted by considering the data of the 15 largest banks operating in the Turkish Banking Sector for the period 2008-2017, and the relationship between banks' asset diversification and riskiness was investigated. While this relationship was found in some banks, it was observed that some banks did not. This study has outlined policy implications and opened up avenues for future research.