The summary statistics of Table 1 shows that the number of these strong interdependences has been decreasing in Japan starting from 1998 suggesting a improvement of the diversification processes of credit allocation in the Japanese market.
But there may, and probably should, be much more slimming to come.New lessons have been learned in the past few months about diversification and the management of credit risk.
We find that firms with riskier receivables, based on the credit risk and diversification of the firms' principal customers, have lower financing capacity and lower leverage in their asset-backed securitizations.
Similarly, securitisation which worked well for decades—allows banks to free up capital, enabling them to extend more credit, and helps diversification of portfolios as banks shed concentrations of risks and investors buy exposures that suit them.
The only bond funds worthy of consideration are junk-bond funds, where diversification offsets credit risk.
These efforts would be most effective if supported by programs offering affordable credit facilities, strengthening extension services, promoting diversification of livelihoods and income sources, and enhancing livestock diversity and promoting species that are drought tolerant.
Mr. Kolluri suggested that average investors would be "better to stick with a fund" for diversification, diluting the credit risk of any individual company.
Our results show the existence of a backbone of the credit relationships not compatible with the null hypothesis of uniform diversification of the bank or of the firm.
Improvements in infrastructure, extension, climate information, market access, credit and social insurance are needed to facilitate adaptation and diversification of smallholder livelihoods.
Here, we inspect the weighted bipartite network by filtering the credit relationships that are not compatible with a null hypothesis assuming uniform diversification of each bank or firm.
