Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2021.1985568
Economic uncertainty and bank risk: the moderating role of risk governance
Xing Zhang
Fengchao Li
Yingying Xu
Jaime Ortiz
Sažetak
Uncertainty is an economically important risk factor in the banking sector. Using a sample of Chinese listed commercial banks
over the period 2005 2018, this research conducted pooled OLS
and found evidence that economic uncertainty significantly
increases bank risk and lowers profitability. Furthermore, we constructed a partial equilibrium model to explain how risk governance alters the risk-increasing effect and profit-decreasing effect
of economic uncertainty on bank risk and profitability. Consistent
with theory, empirical results suggested the effects of economic
uncertainty on bank risk and performance tend to be considerably weaker when there exists a strong risk governance mechanism. These findings stand when subjected to several endogeneity
and robustness checks. Risk governance plays a key role in weakening the detrimental consequences of economic uncertainty on
banks and promoting a sustainable growth of the banking sector.
A financial regulator entity should require banks to establish a
sound risk governance system in order to mitigate financial systemic risk and safeguard overall financial stability
Ključne riječi
financial stability; economic uncertainty; bank risk; bank performance; risk governance
Hrčak ID:
302066
URI
Datum izdavanja:
31.3.2023.
Posjeta: 545 *