INVESTIGATING THE FACTORS AFFECTING RISK MANAGEMENT EFFICIENCY OF COMMERCIAL BANKS

Samina Riaz


DOI: http://dx.doi.org/10.22555/pbr.v18i1.671

Abstract




As a bank’s risk profile continually evolves, it leads to losses
and a bank’s capital base and profitability drive the banking sector’s
capacity to absorb risks. The proper functioning of this system
depends on the proper use of resources collected and this requires
accurate assessment of hazards and risks, and recognition methods
to deal with the risks that lie ahead. Due to this issue, this study
focuses on factors affecting the efficiency of risk management in the
Pakistani banking industry. For empirical findings, Panel regression
analysis has been employed taking a stratum of time series data and
cross-sectional variants of macro and bank-specific factors for the
period covering 2009 to 2013. Empirical results show a positive
relationship between the liquidity, profitability, operating efficiency,
merger and economic growth with capital adequacy ratio while the
asset portfolio risk and inflation rates have the opposite effect


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