Market Liquidity Risk and Market Risk Management

2009 ◽  
Author(s):  
Yu Tian
Keyword(s):  
Risk Management ◽  
Liquidity Risk ◽  
Market Risk ◽  
Market Liquidity

scholarly journals Relationship Between Risk Management Practices and Investment Decisions in Bank of Kigali, Rwanda

2020 ◽  
Vol 1 (1) ◽  
pp. 88-107
Author(s):  
Gedion Alang’o Omwono ◽  
Kayumba Annette
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Best Practice ◽  
Management Practices ◽  
Investment Decisions ◽  
Liquidity Risk ◽  
Market Risk ◽  
Risk Tolerance ◽  
Credit Risk Management ◽  
Risk Monitoring

The purpose of this study was to examine the relationship between risk management practices and investment decisions in Bank of Kigali, Rwanda. This study adopted correlational research design. Descriptive statistics include those of the mean, standard deviation and frequency distribution while inferential statistics involves use of spearman’s coefficient correlations. Linear regression was used where ANOVA was carried on each variable. The study found that there was a correlation between liquidity risk management, default risk management and market risk management with performance of the Banks. The study findings indicated that credit risk management (r=0.096, p<0.01), liquidity risk management (r=0.347, p<0.01), market risk management (r=0.506, p<0.01) and operational risk management (r=0.612, p<0.01) on financial performance. It however found that the Banks do not involve experts and consultants in market risk management thus recommendations were made for the Banks to revise their credit risk management policies, open up and share information with other players on market risk thus involve consultants more in their market risk management and to be more proactive than reactive in risk management. The study concluded that, risk management has a positive influence on the investment decisions and that risk monitoring can be used to make sure that risk management practices are in line with proper best practice risk monitoring policies which also helps bank management to discover exposures at early stages and make corrective actions. The study recommended that, Senior management should develop strategies, policies and practices to manage risk in accordance with the Banks risk tolerance and to ensure that the bank maintains sufficient liquidity risk cover.

Corporate governance in relationship with bank risk management

2021 ◽  
pp. 2150034
Author(s):  
Ika Permatasari
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Credit Risk ◽  
Liquidity Risk ◽  
Market Risk ◽  
Data Sources ◽  
Annual Reports ◽  
Bank Risk ◽  
Financial Reports ◽  
The Relationship

The purpose of this research is to examine the relationship between corporate governance and risk management of Indonesian banks. Bank risk managements are measured by market risk, credit risk, and liquidity risk. The samples used in this study were all banks registered in Indonesia during the 2010–2016 period. The data sources were obtained from the annual reports and bank financial reports. The results show that corporate governance implementation in Indonesia was able to affect credit risk and liquidity risk. There were differences in credit risk and liquidity risk in banks with different governance ratings, but not at market risk.

7. Risk management

2019 ◽  
pp. 106-115
Author(s):  
Mark H. A. Davis
Keyword(s):  
Risk Management ◽  
Liquidity Risk ◽  
Market Risk ◽  
Regulatory Requirements ◽  
Market Prices ◽  
Legal Risk ◽  
Reputational Risk ◽  
Management Function ◽  
Internal Procedures ◽  
Financial Company

The risk management function of a financial company monitors a whole range of risks that the company faces: market risk, credit risk, liquidity risk, operational risk, reputational risk, and legal risk. Some of these are connected to regulatory requirements, while others are internal procedures designed to assist the management of the company’s assets and liabilities. ‘Risk management’ focuses on market risk, which is concerned with assessing how sensitive the value of the company’s trading book is to anticipated movements in the market prices of the assets it contains. Evaluations are carried out at various levels of aggregation from individual trading desk to the company as a whole.

scholarly journals Analysis And Comments On The Consultative Document: International Framework For Liquidity Risk Measurement, Standards And Monitoring

2010 ◽  
Vol 9 (11) ◽  
Author(s):  
Jacques Prefontaine ◽  
Jean Desrochers ◽  
Lise Godbout
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Foreign Currency ◽  
Credit Rating ◽  
Liquidity Risk ◽  
Risk Measurement ◽  
Market Liquidity ◽  
Coverage Ratio ◽  
Measurement Standards ◽  
Playing Field

The market turmoil that began in mid-2007 re-emphasized the importance of liquidity to the functioning of financial markets and the banking sector. In December 2009, the Basel Committee on Banking Supervision (BCBS) of the Bank for International Settlements (BIS) released a consultative document entitled: “International Framework for Liquidity Risk Measurement, Standards and Monitoring”. Interested parties were invited to provide written comments by April 16th 2010. Given our interest in promoting sound liquidity risk management and supervision, three members of the Chair responded to the BIS request. Today, we share with you a summary of our analysis and comments. Our work first supports the adoption  of the BCBS proposals on two new liquidity risk management standards which take the form of a 30-day minimum liquidity coverage ratio (LCR) combined with a one-year minimum net stable funding ratio (NSFR), both to be accompanied by a mandatory set of market-related monitoring tools. Second, we share with you several general comments and suggestions we formulated on the following topics: the need for better coordination, both domestically and internationally between macro and micro-prudential supervision, the need to formulate more precise liquidity risk requirements on foreign currency funding, the importance and usefulness of public financial disclosure, suggestions on extending the use of market-related monitoring rules and metrics. Third, we also share with you more specific comments and suggestions formulated on the following topics : areas of further work like intra-group and cross border liquidity risk management, selling to gauge market liquidity, clarifying LCR and NSFR  definitions, credit rating downgrades, and defining required stable funding categories. Fourth, the results of the analysis support the need to promote a more level business and supervisory playing field for all internationally active banks. Last but not least, we draw the risk-return and financial implications for Canadian banks of the adoption of the BCBS proposals for liquidity risk management and supervision.

scholarly journals Does corporate governance affect bank risk management? Case study of Indonesian banks

2020 ◽  
Vol 4 (2) ◽  
pp. 127-139
Author(s):  
Ika Permatasari
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Credit Risk ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Market Risk ◽  
Bank Risk ◽  
Content Type ◽  
Good Corporate Governance ◽  
The Relationship

PurposeThe purpose of this study is to examine the relationship between corporate governance and risk management of Indonesian banks.Design/methodology/approachImplementation of good corporate governance is measured by good corporate governance composite rating, which is the result of bank's self-assessment. Bank risk managements are measured by market risk, credit risk, liquidity risk and operational risk.FindingsThe study results showed that good corporate governance implementation in Indonesia was able to influence bank risk. There were differences in credit risk, liquidity risk and operational risk in banks with different governance ratings, but not at market risk.Originality/valueThe effectiveness of risk management and good corporate governance implementation is needed to enable banks to identify problems early, to follow up on rapid improvements and to be more resilient to crises. This study is an analysis of the relationship between corporate governance and banks' risk management in Indonesia. In particular, risk management is measured by four risks: market risk, credit risk, liquidity risk and operation risk.

PENGARUH PENERAPAN MANAJEMEN RISIKO TERHADAP KINERJA KEUANGAN (STUDI PADA BANK UMUM KELOMPOK USAHA)

Analisis ◽  
2021 ◽  
Vol 11 (1) ◽  
pp. 21-35
Author(s):  
Nurfauziah Nurfauziah ◽  
Sri Mulyati
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Stock Returns ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Market Risk ◽  
Group 4 ◽  
Bank Stock ◽  
Book Group ◽  
Group 1

Risk management is part of a comprehensive business strategy with the aim of contributing to protecting and increasing shareholder value. An increase in stock value indicates an increase in stock returns obtained by investors. This study examines the effect of risk management implementation on bank stock returns as seen from the bank book group, namely bank book group 1, bank book group 2, bank book group 3 and bank book group 4. The application of risk management is seen from credit risk, liquidity risk, risk. operational and market risk. The research was conducted on all commercial banks that went public and were active from 2015 to 2019, as many as 44 banks. The results of the study state that: overall (for all bank book groups) the application of risk management, namely credit risk, liquidity risk, operational risk and market risk does not affect stock returns, except for bank book group 1, credit risk and operational risk and market risk for book group 4 has a significant effect on stock returns.

scholarly journals Risk Management and Financial Performance of Manufacturing Firms in Nigeria

2021 ◽  
Vol 7 (1) ◽  
pp. 67-77
Author(s):  
Gideon Tayo Akinleye ◽  
Comfort Temidayo Olanipekun
Keyword(s):  
Risk Management ◽  
Interest Rate ◽  
Financial Performance ◽  
Internal Control ◽  
Liquidity Risk ◽  
Secondary Data ◽  
Market Risk ◽  
Interest Rate Risk ◽  
Manufacturing Firms ◽  
Annual Reports

The current study investigated risk management and financial performance of manufacturing firms. Specifically, the study analyzed liquidity risk and market risk effect on after tax profit of manufacturing establishment in Nigeria. The study employed panel data over the period spanning from 2010-2019 across 10 firms. Secondary data were gathered through the annual reports of the selected firms. Correlation analysis and panel-based estimation techniques were used. The outcome showed that liquidity risk positively and significantly affect profit after tax while market risk (measured by interest rate risk) negatively and insignificantly affect profit after tax of sampled firms quoted in Nigeria. This study concluded that efficient and effective risk management will positively affect performance of quoted firms in Nigeria, most specially management of internal risk such as the liquidity risk. Hence, firms should build an internal control system flexible in nature to harness the benefit of internal risk management and also normalize the negative effect of external risk such as the interest rate on performance.

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