Modernising operational risk management in financial institutions via data-driven causal factors analysis: A pre-registered report

Cornwell, Nikki; Bilson, Christopher; Gepp, Adrian; Stern, Steven; Vanstone, Bruce J

doi:10.1016/j.pacfin.2022.101906

Cited by 9 publications

(7 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The aforementioned outcome highlights the significance of incorporating risk management strategies that are comprehensive in financial establishments. The findings of current research are in line with the findings of previous researches (Anwer et al, 2023;Bhatt et al, 2023;Cornwell et al, 2023;Haziaton et al, 2020;Hunjra et al, 2022).…”

Section: Discussionsupporting

confidence: 92%

“…The implementation of efficient liquidity management strategies enables financial institutions to fulfill their funding needs and responsibilities, while simultaneously ensuring the availability of adequate liquid reserves to withstand unforeseen liquidity disruptions. The significance of liquidity management on the performance of conventional banks can be substantial within this particular context (Cornwell et al, 2023). An approach to assess the influence of liquidity management on the conventional banking sector's performance is to scrutinize crucial financial metrics, including but not limited to profitability, asset quality, and solvency.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Analyzing the Role of Liquidity and Credit Risk Management on the Performance of Financial Institutions: A Case of Emerging Economy

Sun Jianfu,

Hussain,

Khawar Abbas

2023

CISSMP

View full text Add to dashboard Cite

This research paper examines the impact of liquidity and credit risk management on the performance of Pakistan's financial institutions. The study employs quantitative research methodology to collect secondary data from the annual reports of fifteen commercial institutions for the years 2012-2021. The researchers analyzed the data through panel regression analysis. According to the findings of the study, liquidity and credit risk management have a significant and positive effect on the financial performance of Pakistani institutions. This study is innovative because it focuses on the Pakistani financial industry, which has not been extensively examined in the literature. This study also contributes to the existing literature on the impact of liquidity and credit risk management on banks' financial performance. This study focuses on only 15 institutions in Pakistan, limiting the generalizability of the results. Future research can increase the sample size to include more banks and also consider other variables that may influence the financial performance of Pakistani banks. The study's findings can provide policymakers, regulators, and financial institutions with valuable insights to enhance their liquidity and credit risk management practices.

show abstract

Section: Discussionsupporting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Analyzing the Role of Liquidity and Credit Risk Management on the Performance of Financial Institutions: A Case of Emerging Economy

Sun Jianfu,

Hussain,

Khawar Abbas

2023

CISSMP

View full text Add to dashboard Cite

show abstract

“…Sound corporate governance practices prioritize effective risk management, enabling companies to identify, assess, and mitigate financial, operational, legal, and reputational risks [38]. A robust risk management approach can prevent potential financial losses and protect company assets, safeguarding financial performance [39]. Moreover, corporate governance practices that prioritize long-term sustainability and value creation over short-term gains contribute to improved financial performance [40].…”

Section: Literature Review and Theoretical Framework Underpinning The...mentioning

confidence: 99%

The Moderating Effects of Corporate Social Responsibility on Corporate Financial Performance: Evidence from OECD Countries

Hamad

Çek

2023

Sustainability

View full text Add to dashboard Cite

This study aims to investigate the nature and intensity of the changes in corporate financial performance due to the corporate social responsibility (CSR) disclosures as a result of certain relationships between corporate governance and company performance in the non-financial sector. This study selected 625 non-financial companies across six organizations for economic cooperations (OECD) countries’ stock markets for the period of 10 years (2012–2021). For this qualitative study, corporate governance, financial performance, and corporate social responsibility score data were collected from the DataStream, a reliable database for examining the research on OECD countries’ listed companies. For the data analysis we applied various statistical tools such as regression analysis and moderation analysis. The findings of the study show that all attributes of the corporate governance mechanism, except for audit board attendance, have significant positive impacts on financial performance indicators for all the selected OECD economies except the country France. France’s code of corporate governance has a significant negative impact on return on asset (ROA) and return on equity (ROE) due to differences in cultural and operational norms of the country. The audit board attendance has no significant impact on ROA. Moreover, all the attributes except board size (BSIZ) have significant positive impacts on the earnings per share (EPS) in Spain, The United Kingdom (UK) and Belgium. The values obtained from the moderation effect show that Corporate social responsibility is the key factor in motivating corporate governance practices which eventually improves corporate financial performance. However, this study advocated the implications, Investors and stakeholders should consider both corporate governance and CSR disclosures when making investment decisions. Companies that prioritize both governance and CSR tend to have better financial performance and are more likely to mitigate risks. Moreover, the policy makers can improve the code of corporate governance in order to attain sustainable development in the stock market.

show abstract

“…Operational risk exists in all types of organizations and business units of financial institutions (Cornwell et al, 2023;Darmawan, 2014). It can be called a significant risk in almost all industries (Neil et al, 2009;Corrigan & Luraschi, 2013).…”

Section: Introductionmentioning

confidence: 99%

“…It can be called a significant risk in almost all industries (Neil et al, 2009;Corrigan & Luraschi, 2013). Operational risks can result in substantial financial losses, reputational damage, and losses to customers and employees, either directly or indirectly (Cornwell et al, 2023).…”

Section: Introductionmentioning

confidence: 99%

Is the hybrid method more adequate for measuring operational risk?

Farsiah,

Amalia,

Saharuddin

et al. 2024

JAI

View full text Add to dashboard Cite

Research aims: Risk management in financial institutions struggles with setting suitable capital charges for operational losses, resulting in large, disproportionate reserves that impact profits. This study, therefore, aims to develop a tailored operational risk measurement model for general takaful companies, addressing this challenge and optimizing capital allocation.Design/Methodology/Approach: This study employed a hybrid approach, merging the loss distribution approach (LDA) with historical data and scenario analysis for insurance company loss events. Compiling data into distributions, it utilized Monte Carlo simulations to determine value at risk (VaR). The resulting VaR guided the calculation of operational risk capital charges for future periods.Research findings: Measurement using the hybrid method could produce more adequate operational risk capital charges. These results confirm the acceptability of the VaR calculation and have been validated by the Kupic test.Theoretical contribution/Originality: This research offers a more comprehensive alternative method of measuring operational risk by combining historical company data with expert opinions, making it more likely to be practiced in the industry.Practitioner/Policy implication: The results of this study put forward an alternative, more suitable model for industry and regulators to measure operational risk management in general takaful companies.

show abstract

Modernising operational risk management in financial institutions via data-driven causal factors analysis: A pre-registered report

Cited by 9 publications

References 32 publications

Analyzing the Role of Liquidity and Credit Risk Management on the Performance of Financial Institutions: A Case of Emerging Economy

Analyzing the Role of Liquidity and Credit Risk Management on the Performance of Financial Institutions: A Case of Emerging Economy

The Moderating Effects of Corporate Social Responsibility on Corporate Financial Performance: Evidence from OECD Countries

Is the hybrid method more adequate for measuring operational risk?

Contact Info

Product

Resources

About