Bank Risk Appetite Communication and Risk Taking: The Key Role of Integrated Reports

Risk Analysis ◽  
2021 ◽  
Author(s):  
Chiara Mio ◽  
Marisa Agostini ◽  
Silvia Panfilo
Keyword(s):  
Risk Taking ◽  
Bank Risk ◽  
Risk Appetite

The Coordination Role of Stress Tests in Bank Risk‐Taking

2019 ◽  
Vol 57 (5) ◽  
pp. 1161-1200 ◽  
Author(s):  
CARLOS CORONA ◽  
LIN NAN ◽  
GAOQING ZHANG
Keyword(s):  
Risk Taking ◽  
Bank Risk ◽  
Stress Tests

Effect of monetary policy on bank risk: does market structure matter?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muntazir Hussain ◽  
Usman Bashir ◽  
Ahmad Raza Bilal
Keyword(s):  
Monetary Policy ◽  
Market Structure ◽  
Risk Taking ◽  
Bank Risk ◽  
Monetary Policy Transmission ◽  
Content Type ◽  
Bank Of China ◽  
Policy Transmission ◽  
Chinese Banking Industry

PurposeThe purpose of this paper is to investigate the risk-taking channel of monetary policy transmission in the Chinese banking industry. This study also investigates the role of various other factors in the risk-taking channel.Design/methodology/approachThis study used panel data from 2000 to 2012, and a dynamic panel model (Difference GMM) was applied.FindingsThe empirical findings of this paper suggest that loose monetary policy rates increase bank risk-taking. Unlike previous studies, the results of this paper suggest that the bank-specific factors (size, liquidity and capitalization) do not significantly affect the risk-taking channel. However, the market structure does have a stabilizing effect on monetary policy transmission and the risk-taking channel. Higher market power weakens the risk-taking channel of monetary policy transmission.Practical implicationsOf significance to the policymakers' point of view is that loose monetary policy induces banks to take excessive risks. However, such effects can be mitigated by encouraging a proper level of market power in banking markets.Originality/valueThis study investigated the risk-taking channel of monetary policy transmission for the Chinese banking industry. Due to the unique features of the People's Bank of China (PBC, Central Bank of China) policy, this study also contributes to the literature by comparing price-based and quantity-based monetary policy tools and their effectiveness in financial stability and monetary policy transmission. Furthermore, the role of market structure is also investigated in the risk-taking channel.

The Effect of the Paycheck Protection Program and Financial Reporting Standards on Bank Risk-Taking

2021 ◽  
Author(s):  
Hailey B. Ballew ◽  
Allison Nicoletti ◽  
Sarah B. Stuber
Keyword(s):  
Financial Reporting ◽  
Risk Taking ◽  
Bank Risk ◽  
Reporting Standards ◽  
Loan Loss ◽  
Financial Reporting Standards ◽  
Loan Loss Provisions ◽  
Changes In Risk ◽  
Insight Into

This paper examines the consequences of the paycheck protection program (PPP) for bank risk-taking and whether the shift to the current expected credit loss (CECL) model moderates this effect. We find that the extent of a bank’s PPP participation is associated with relatively greater changes in risk-taking outside of the PPP. We also show that this effect is concentrated in banks that have not early adopted the CECL model and banks with timelier pre-PPP loan loss provisions, suggesting that timelier loan loss recognition constrains risk-taking incentives. Overall, our findings provide insight into the indirect consequences of government stimulus programs administered through banks and the role of accounting in constraining bank risk-taking. This paper was accepted by Suraj Srinivasan, accounting.

Does economic freedom matter for risk-taking? Evidence from MENA banks

2016 ◽  
Vol 8 (2) ◽  
pp. 114-136 ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Risk Taking ◽  
Instrumental Variable ◽  
Design Methodology ◽  
Economic Freedom ◽  
Bank Risk ◽  
Cross Sectional ◽  
Content Type ◽  
Level Data ◽  
Risk Appetite ◽  
The Impact

Purpose The relevance of economic freedom in influencing bank risk taking has not been adequately addressed in the literature. In this connection, employing bank-level data for 2000-2012, the purpose of this paper is to examine the impact of economic freedom on risk taking by MENA banks. Design/methodology/approach Given the cross-sectional time-series nature of the data, the author employs panel data techniques to explore this issue. In addition, the author examines the robustness of the results using instrumental variable techniques. Findings The findings appear to suggest that economic freedom exerts a significant and non-negligible impact on bank risk taking. Among the sub-components of economic freedom, it is observed that higher levels of both business and monetary freedom increase variability of profits and, thereby, raise the risk appetite of banks. Risk taking by banks appears to be reliably lower after the crisis than in the period prior to it, although there was a substantial increase in bank risk taking during the crisis. Originality/value To the best of the author’s knowledge, this is one of the earliest studies to explore the interlinkage between economic freedom and bank risk taking for MENA banks.

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