Based on datasets provided by the Deutsche Bundesbank, Rolf Böve empirically investigates whether industry concentration or specialization in certain sectors in the lending business only brings disadvantages for a bank. The results show, among other things, that specialization tends to be associated with better monitoring quality and, in the case of credit cooperatives, also with a lower-risk industry choice. For savings banks, the monitoring advantages translate into higher risk-adjusted loan returns for the specialized institutions.