scholarly journals Theoretical Framework for Research on the Factors Affecting the Moral Hazard in Banking Operation

2021 ◽  
Vol 4 (3) ◽  
Author(s):  
Ngo Thanh Xuan ◽  
◽  
Do Hoai Linh ◽  
Khuc The Anh ◽  
Nguyen Khoa Duc Anh
Keyword(s):  
Moral Hazard ◽  
Credit Risk ◽  
Banking System ◽  
Operational Risk ◽  
Theoretical Framework ◽  
Ethical Conduct ◽  
Factors Affecting ◽  
Banking Operations

There are many types of risks related to banking operations such as credit risk, interest risk, operational risk. Problems related to moral hazard have led to considerable setbacks for the economy in general and banking system in particular. Besides, moral hazard is an economic and financial terminology and is used to denote the risk generated from the deterioration in ethical conduct. Hence, authors aim at reviewing theoretical framework for determinants impacting moral hazard in banks.

scholarly journals Theoretical Framework for Research on the Factors Affecting the Moral Hazard in Banking Operation

2021 ◽  
Author(s):  
Ngo Thanh Xuan ◽  
Hoai Linh ◽  
Khuc The Anh ◽  
Nguyen Khoa Duc Anh
Keyword(s):  
Moral Hazard ◽  
Credit Risk ◽  
Banking System ◽  
Operational Risk ◽  
Theoretical Framework ◽  
Ethical Conduct ◽  
Factors Affecting ◽  
Banking Operations

There are many types of risks related to banking operations such as credit risk, interest risk, operational risk. Problems related to moral hazard have led to considerable setbacks for the economy in general and banking system in particular. Besides, moral hazard is an economic and financial terminology and is used to denote the risk generated from the deterioration in ethical conduct. Hence, authors aim at reviewing theoretical framework for determinants impacting moral hazard in banks.

scholarly journals Analysis of The Influence of Liquidity, Credit and Operational Risk, in Indonesian Islamic Bank’s Financing for The Period 2007-2013

2015 ◽  
Vol 17 (3) ◽  
pp. 279 ◽  
Author(s):  
Ousmane Diallo ◽  
Tettet Fitrijanti ◽  
Nanny Dewi Tanzil
Keyword(s):  
Credit Risk ◽  
Causal Relationship ◽  
Risk Sharing ◽  
Banking Sector ◽  
Panel Data Analysis ◽  
Banking System ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Islamic Banking ◽  
Islamic Bank

The purpose of this paper is to analyze the influence of credit, liquidity and operational risks in six Indonesian’s islamic banking financing products namely mudharabah, musyarakah, murabahah, istishna, ijarah and qardh, in order to try to discover whether or not Indonesian islamic banking is based on the “risk-sharing” system. This paper relies on a fixed effect model test based on the panel data analysis method, focusing on the period from 2007 to 2013. The research is an exploratory and descriptive study of all the Indonesian islamic banks that were operating in 2013. The results of this study show that the Islamic banking system in Indonesia truly has banking products based on “risk-sharing.” We found out that credit, operational and liquidity risks as a whole, have significant influence on mudarabah, musyarakah, murabahah, istishna, ijarah and qardh based financing. There is a correlation between the credit risk and mudarabah based financing, and no causal relationship between the credit risk and musharaka, murabahah, ijarah, istishna and qardh based financing. There is also correlation between the operational risk and mudarabah and murabahah based financing, and no causal relationship between the operational risk and musharaka, istishna, ijarah and qardh based financing. There is correlation between the liquidity risk and istishna based financing, and no causal relationship between the liquidity risk and musharaka, mudarabah, murabahah, ijarah and qardh based financing. A major implication of this study is the fact that there is no causal relationship between the credit risk and musharakah based financing, which is the mode of financing where the islamic bank shares the risk with its clients, but there is an influence of credit risk toward mudarabah mode financing, a financing mode where the Islamic bank bears all the risk. These findings can lead us to conclude that the Indonesian Islamic banking sector is based on the “risk sharing” system.

scholarly journals Analysis of The Influence of Liquidity, Credit and Operational Risk, in Indonesian Islamic Bank’s Financing for The Period 2007-2013

2015 ◽  
Vol 17 (3) ◽  
pp. 279 ◽  
Author(s):  
Ousmane Diallo ◽  
Tettet Fitrijanti ◽  
Nanny Nanny Tanzil
Keyword(s):  
Credit Risk ◽  
Causal Relationship ◽  
Risk Sharing ◽  
Banking Sector ◽  
Panel Data Analysis ◽  
Banking System ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Islamic Banking ◽  
Islamic Bank

The purpose of this paper is to analyze the influence of credit, liquidity and operational risks in six Indonesian’s islamic banking financing products namely mudharabah, musyarakah, murabahah, istishna, ijarah and qardh, in order to try to discover whether or not Indonesian islamic banking is based on the “risk-sharing” system. This paper relies on a fixed effect model test based on the panel data analysis method, focusing on the period from 2007 to 2013. The research is an exploratory and descriptive study of all the Indonesian islamic banks that were operating in 2013. The results of this study show that the Islamic banking system in Indonesia truly has banking products based on “risk-sharing.” We found out that credit, operational and liquidity risks as a whole, have significant influence on mudarabah, musyarakah, murabahah, istishna, ijarah and qardh based financing. There is a correlation between the credit risk and mudarabah based financing, and no causal relationship between the credit risk and musharaka, murabahah, ijarah, istishna and qardh based financing. There is also correlation between the operational risk and mudarabah and murabahah based financing, and no causal relationship between the operational risk and musharaka, istishna, ijarah and qardh based financing. There is correlation between the liquidity risk and istishna based financing, and no causal relationship between the liquidity risk and musharaka, mudarabah, murabahah, ijarah and qardh based financing. A major implication of this study is the fact that there is no causal relationship between the credit risk and musharakah based financing, which is the mode of financing where the islamic bank shares the risk with its clients, but there is an influence of credit risk toward mudarabah mode financing, a financing mode where the Islamic bank bears all the risk. These findings can lead us to conclude that the Indonesian Islamic banking sector is based on the “risk sharing” system.

scholarly journals Accounting for operational risk in credit institutions while improving the bank’s economic security

2020 ◽  
pp. 59-70
Author(s):  
Natalya Filimonova ◽  
Ol'ga Luskatova ◽  
Marina Roberts
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Operational Risk ◽  
Economic Security ◽  
Credit Institution ◽  
Factors Affecting ◽  
Operational Risks ◽  
System Methodology ◽  
Credit Institutions

The article considers the economic security of the banking system as an integral part of the national security of the country. Approaches to the assessment of the concept and factors of economic security of credit institutions are studied, the state of the banking sector for the period 2018—2020 is analyzed, development problems and factors affecting the level of economic security of banks are identified. The role of accounting for operational risks in ensuring and improving the economic security of a credit institution is described using the example of Sberbank. Measures to limit operational risk are presented, and the effectiveness of proposals is calculated using the CAMELS rating system methodology.

scholarly journals Risk Reporting of the Banking Sector of Bangladesh: A Time Horizon Analysis

2018 ◽  
Vol 10 (1) ◽  
pp. 178
Author(s):  
Niluthpaul Sarker ◽  
Shamsun Nahar
Keyword(s):  
Credit Risk ◽  
Time Horizon ◽  
Banking Sector ◽  
Banking System ◽  
Operational Risk ◽  
Market Risk ◽  
Bank Risk ◽  
Financial Disclosures ◽  
Risk Disclosures ◽  
Risk Reporting

The study focused on the practical scenarios of bank risk disclosures where it is assumed that adequate risk disclosures expand the path of transparency in the marketplace. The reason is that the financial disclosures, including risk items, represent their image of the current and potential investors, and can impact their mentality about investment. The research analyzed the credit risk, market risk and operational risk reporting intensities in their reports. It is noted that the maximum Risk Weighted Assets (RWA) are held for credit risk of the banking system whereas the remaining part of the system utilized by the market risk and operational risk. It is found that the risk for the top five (5) or the top ten (10) banks is extremely high. The concentration symptom of risk is not good as the fewer borrowers occupied the most of the credit.

Part A Regulatory Matters, 6 Capital Adequacy, Liquidity, and Large Exposures

2015 ◽  
Author(s):  
Proctor Charles
Keyword(s):  
Credit Risk ◽  
Risk Mitigation ◽  
Banking System ◽  
Operational Risk ◽  
Market Risk ◽  
Capital Adequacy ◽  
Mitigation Techniques ◽  
The Stability ◽  
Basel 3

This chapter examines the current capital adequacy framework and associated provisions designed to ensure that a bank's business is managed on a prudent basis. It also considers other closely allied topics which may affect the stability of the banking system, namely, liquidity and large exposure requirement. Topics discussed include the origins of the Basel Standards; Basel 2 and Basel 3 rules; the calculation of risk-weighted assets; the nature and effect of credit risk mitigation techniques; market risk; operational risk; and reform on Basel 2.

scholarly journals Credit Risk and Operational Risk Determinants of Conventional and Islamic Banking in Malaysia and Bahrain

2021 ◽  
Vol 7 (1) ◽  
pp. 30-33
Author(s):  
Norazwa Ahmad Zolkifli ◽  
Zanita Ismail ◽  
Nurul Syamshida Mokhtar
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Panel Data Analysis ◽  
Banking System ◽  
Operational Risk ◽  
Financial Statements ◽  
Annual Reports ◽  
International Banking ◽  
Conventional Banks ◽  
Risk Determinants

The focus of this study on both Islamic and conventional banks is to consider the unique duality banking system in the countries. Data is obtained from annual reports and websites of selected banks. Financial statements for 10 years beginning from 2009 until 2018 were used for extracting data for analyzing the credit and operational risk using E-view software. Furthermore, panel data analysis were used in combination with time series and cross section. The findings reveal that the determinants of credit risk and operational risk are difference between banking in Malaysia and Bahrain. The banking system will have a solid risk management system that will assist Malaysia and Bahrain to develop a strong economy as well as the possible adoption of risk management by the international banking system.

scholarly journals Does Banking Management Affect Credit Risk? Evidence from the Indian Banking System

2018 ◽  
Vol 6 (3) ◽  
pp. 67 ◽  
Author(s):  
Laxmi Koju ◽  
Ram Koju ◽  
Shouyang Wang
Keyword(s):  
Credit Risk ◽  
Default Risk ◽  
Banking System ◽  
Capital Requirements ◽  
Operating Efficiency ◽  
Investment Strategies ◽  
Empirical Results ◽  
Bank Managers ◽  
Credit Standards ◽  
The Impact

This study investigated the impact of banking management on credit risk using a sample of Indian commercial banks. The study employed dynamic panel estimations to evaluate the link between banking management variables and credit risk. The empirical results show that an increase in loan portion over total assets does not necessarily increase problem loans. The findings suggest that high capital requirements and large bank size do not reduce default risk, whereas high profitability and strong income diversification policies lower the likelihood of default risk. The overall empirical results supported the “operating efficiency”, “diversification” and “too big to fail” hypotheses, confirming that credit quality in the banking industry is mainly driven by profitability, banking supervision, high credit standards and strong investment strategies. The findings are relevant to bank managers, investors and bank regulators, in formulating effective credit policies and investment strategies.

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