In an environment of increasingly frequent consolidation activity, the advantages and risks of corporate diversification are of great interest to regulatory authorities, financial group management and management of individual group entities. In general, conglomeration leads to a diversification of risks (the diversification benefit) and to a decrease in shareholder value (the conglomerate discount). Diversification benefits in financial conglomerates are typically derived without accounting for reduced shareholder value, even though a comprehensive analysis requires competitive conditions within the conglomerate, i.e.shareholders and debtholders receive risk-adequate returns