Other (O2)

Risk governance and risk-taking of public commercial banks of OECD
(Extended Abstract proceeding of MODAV conference)

List of AuthorsMalik Muddassar

EditorsHümeyra Adıgüzel, Metehan Küçüker, Banu Sultanoğlu, Nevzat Güngör

Conference nameInternational Conference on Accounting

PublisherTurkish Accounting Academician's Collaboration and Research Foundation


Publication year2021

Book title *MODAV 18th International Conference on Accounting: New Dynamics of Accounting:Transformation in Theory and Practice

Start page120

End page124


Self-archived copy’s web addresshttps://research.utu.fi/converis/portal/detail/Publication/68035238


This research paper examines the impact of risk governance on the risk-taking of public commercial banks of 
Organization for Economic Co-operation and Development (OECD). Risk-taking is central to the banking industry. Risk-taking by banks goes back to several centuries. Risk-taking also brought forward several tough challenges over the time. The challenges confronting risk-taking are more noticeable since the Great Depression of 1930. There have been notable efforts to curb negative outcome of excessive risk-taking, however, thus far there has not been profound resolution to address and channel risk-taking in banks. Since the end of 1900 the term risk governance was introduced which was later incorporated into banking industry in the most recent decade to curb and channel banks’ risk-taking. In this research several risk governance characteristics are studied which are central to banks’ internal risk governance. The core risk governance consists of Risk Committee (RC), Chief Risk Officer (CRO), and Chief Financial Officer (CFO). An additional supportive layer has been added to the core internal risk governance which includes director’s ownership, 
directors with PhD degrees, directors between the age of 65-75, and independent directors. Risk-taking is measured by leverage, σ (ROA), Equity Asset Ratio (EAR), and Z-score. Our results suggest that there is an association between risk governance and risk-taking of banks and this association between risk governance intensity and risk-taking is stronger during the Global Financial Crisis of 2007-08 (GFC). This research provides insights to internal risk governance of public commercial banks and its impact on their risk-taking which is relevant to related authorities and personnel. 

Last updated on 2023-16-03 at 08:19