How bank business models relate with risk?: the case of Portugal in times of financial crisis

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Finance from the NOVA – School of Business and EconomicsUsing as explanatory variables the main characteristics of the four major Portuguese banks business models’ and also three additional macroeconomic variables and considering the period preceding the financial crisis that hit the financial markets of the whole economy (from the first quarter of 2001 to the third quarter of 2007) I studied the consequent relation with the distress of banks during the crisis period (from the fourth quarter of 2007 to the fourth quarter of 2009). According to the results of the model, the higher risk exposure associated with higher distress of banks depends mainly on external factors such as the changes in GDP and changes in returns of non financial corporations