Empirical Analysis of Malaysian Commercial Bank Risk Management Behavior In Relation To Efficiency

Abstract

The researchers analyzed the risk management practices of banking institutions in Malaysia, to examine the impact of risk. The scope and sample of the study were nine commercial banks operating in Malaysia. The results were analyzed using Data Envelopment Analysis, a nonparametric approach, and later confirmed by conducting several regression analysis. The result suggests that volatility had a significant relationship with risk-adjusted return on capital; risk in the year 2006, 2007 and 2008 did not significantly predict the risk-adjusted return on capital.