As an aside, I would like to add that the paper by Imbs et al. might also be interesting from a totally different angle: Their application of portfolio theory aims at further diversifying the finance and growth methodology. Only yesterday, George von Furstenberg and Ulf von Kalckreuth reminded us not to fall into the trap of taking well-known methodological assumptions for granted.
To avoid concentration risk, banks are mandated to restrict their exposures to a maximum of 15 per cent of the banks’ capital funds in case of a single borrower and 40 per cent in case of a borrower group.