This paper studies the effect of securitization in financial conglomerates on their risk choice, and compares it with the choice of standalone banks. Loan sales in conglomerates avoid information asymmetry, which enables conglomerate banks to shift worse loan risk to the deposit insurance by selling their best loans to the affiliates. However, such a value transfer induces a better asset monitoring by conglomerate enhancing their asset value. Under low capital requirements, conglomerate banks may be safer than standalone banks due to higher monitoring incentives. The model speaks to Vicker’s proposal of the UK structural reform showing that higher bank capital requirements alone may not offset conglomerate banks’ risk shifting incentives.