We analyze the balance sheets of commercial banks for the three-year period (1993-1995) and make three major observations. First, we confirm earlier work that shows that risk-taking behavior is related to the degree of monitoring and control afforded by different ownership forms during a period of regulatory forbearance. Second, we measure risk using financial statement data. This is important for economies where there are limited stock market activities. Third, we add to the debate of whether contagion is a real threat among financial institutions within a group. Specifically, we show that commercial banks that are a part of a financial group do not appear to place the depositors' funds at greater than normal risk. However commercial banks that are part of a nonfinancial group do place depositors funds at greater risk.
