Volume 16, Issue 4 (Fall 2021)                   J. Mon. Ec. 2021, 16(4): 447-476 | Back to browse issues page

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Ahmadyan A, Ghasemi Ali Abadi M. Relationship between Corporate Governance and Risk Management. J. Mon. Ec.. 2021; 16 (4) :447-476
URL: http://jme.mbri.ac.ir/article-1-542-en.html
1- Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran
2- Department of Risk, Compliance, and Anti-Money Laundering, Parsian Bank,
Abstract:   (252 Views)
Corporate governance of banks is one of the most important structures required by banks to maintain the health and stability of banks, which can play an important role in managing banks' risk. This paper examines the effect of corporate governance on liquidity risk management, credit risk management, and total bank risk management. We used board structure effectiveness, transparency, and responsibility as corporate governance indicators. The financial ratio approach is also used to measure risk management. The period under review was 2006-2018. In addition to corporate governance criteria, other explanatory variables affecting banks' risk management have also been used. This paper used the performing unit root, cointegration, and F-Limmer tests to ensure panel estimation. Given the impact of past banks' risk management on current risk management, this variable has also been modeled as an explanatory variable. For this reason, the GMM method has been used to estimate the models in question. Given the importance of bank size in corporate governance on bank risk management, Banks are divided into large and small groups, so the effect of corporate governance in large and small banks has also been investigated on bank risk management. The results show that compliance with corporate governance criteria positively affects banks' risk management. However, due to weak corporate governance in large banks, corporate governance in large banks hurts bank risk management.
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Type of Study: Original Research - Empirical | Subject: Microeconomics
Received: 22 May 2021 | Accepted: 26 Feb 2022 | Published: 2 Mar 2022

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