Risk assessment and monitoring of financial conglomerates.

Summary Structural changes in the financial industry are numerous, protean and complex. The analysis of their consequences, particularly in terms of financial stability, is crucial. Our work focuses on one of these transformations, namely the emergence and development of financial conglomeration, which has the singularity of intertwining diversification and globalization, and which, in our opinion, has been relatively little studied. Our objective is therefore to contribute to filling this gap. We have structured our reflection around three axes: the practical understanding of financial conglomeration, its implications in terms of risk, and its implications for prudential arrangements, and more particularly for supervisory architecture. We propose to compensate for the absence of data specifically dedicated to this movement by using data related to M&A transactions. While it is impossible to state unequivocally whether these groups are more or less risky than their individual counterparts and likely to expose the financial sphere to exacerbated and/or new risks, we make explicit the elements likely to generate a higher risk profile, emphasize the importance of adopting a global perspective of the level of risk incurred and demonstrate the pernicious impact of the diversification strategy on the probability of systemic risk. Finally, we show using a Multinomial Probit that financial conglomeration is an explanatory factor along with the traditionally emphasized factors of unification of national supervisors.