Client importance, bank risk, and systemic risk

Li, Li; Ma, Mary; Song, Victor

doi:10.1108/ara-03-2018-0068

Cited by 3 publications

(3 citation statements)

References 81 publications

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“…The present study applies the same approach to the Turkish banking sector and analyses its impact at the bank ownership and size level. Li (2018) reported a long list of Z-score variations used in the literature.…”

Section: Methodsmentioning

confidence: 99%

Bank Stability and Systemic Risk Measurement

Tarkocin,

Donduran

2023

IJFBS

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The banking system’s role as an intermediary between depositors and borrowers makes its stability a crucial element of the economy. Individual bank stability impacts the stability of the financial sector and, consequently, the real sector and economic growth. This study is a detailed investigation of bank stability scores for the Turkish banking sector. Turkey experienced a major banking crisis from 2000 to 2001. However, with an improved regulatory environment and structural reforms, its resilience to shocks increased significantly in subsequent years. The present study contributes to the literature in three areas. First, it applies eight variations of the Z-score to the Turkish banking sector to test the importance of time and risk variation. Second, it investigates the impact on stability scores of several factors–the implementation of new capital regulations and Basel III liquidity rules, the Turkish lira crisis and the effects of COVID-19). Finally, it measures the contribution to systemic risk of each Turkish bank using the leave-one-out (LOO) Z-score method; this is the first study to use this method to analyse the contribution of different bank types to the overall stability of the sector.

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Section: Methodsmentioning

confidence: 99%

Bank Stability and Systemic Risk Measurement

Tarkocin,

Donduran

2023

IJFBS

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“…To safeguard their public reputation of high-quality auditing firms, it is expected that firms audited by them would report more risk information. Prior literature also concludes that banks tend to exert greater efforts towards high-quality auditing processes because they reduce bank-specific risk and systemic risk exposures (Li et al. , 2018).…”

Section: Methodsmentioning

confidence: 99%

The determinants of risk reporting during the period of adoption of Basel II Accord: evidence from the Portuguese commercial banks

Azevedo

Oliveira

Sousa

et al. 2022

ARA

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PurposeThe purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.Design/methodology/approachThe paper conducts a content analysis of the risk and risk management sections included in the management reports and the notes of the annual reports of Portuguese commercial banks, for the years 2007, 2010 and 2013.FindingsFindings show that theoretical frameworks underpinned in agency and legitimacy theories continue to provide valid explanations for risk reporting by Portuguese banks. More specifically, findings indicate that agency costs, public visibility and reputation are crucial drivers of risk reporting. Findings also indicate that younger banks with lower risk management skills use risk reporting either as an informational process or as a channel to manage organizational legitimacy.Research limitations/implicationsThe content analysis does not allow readily for in-depth qualitative inquiry. The coding instrument is subject to coder bias. Information about risk can be provided in sources other than annual reports. Additionally, not all banks disclose information on corporate governance-related variables that could also influence risk reporting.Originality/valueThe current research setting has never been studied hitherto. In this sense, this study seems to be of great relevance given the scarcity of literature on the subject in Portugal.

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“…To maintain their high quality as auditing firms, it is expected that they encourage firms to disclose more risk information (Chalmers and Godfrey, 2004). Additionally, greater efforts towards high-quality auditing processes reduce industry-specific risk and systemic risk exposure (Li et al. , 2018).…”

Section: Methodsmentioning

confidence: 99%

Risk reporting: do country-level institutional forces really matter?

Serrasqueiro

Oliveira

2022

ARA

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PurposeThe study aims to analyse annual reports of the non-financial European firms listed at the EURO STOXX 50 index over the period of 2007 and 2011.Design/methodology/approachThis study intends to address two main issues: to what extent the country-level institutional forces compel (directly) firm's risk reporting (RR) behaviour and in which way these country-level institutional forces moderate the relationship between RR and firm-level characteristics.FindingsMain findings indicate that, during this period, the European listed companies disclosed more risk information on a voluntary basis (such as operational and strategic risks) and with better informative content (more forward-looking and focused on positive news). Consistent with institutional theory, findings confirm that the country-level institutional forces explain variations on RR. Additionally, it also indicates that the relationship between RR and leveraged firms is weaker among countries with stronger institutional forces. These findings have several implications for investors and regulators in Europe basically in helping achieve efficiency in investment decisions and to stimulate further efforts to improve RR regulations.Originality/valueThis study makes two major contributions. First, it extends Elshandidy's et al. (2015) work by using other country-level institutional forces that capture the efficacy of corporate boards, the protection of minority shareholders' interests, country's level of democracy, law enforcement mechanisms and press freedom. Second, it uses firms that are considered as a blue-chip representation of super-sector leaders in the Eurozone (but from different institutional contexts). This research setting can be more insightful in shedding some light towards our understanding on how these leading firms can promote innovative and high quality level of RR and how country-level driving forces influence these variables.

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Client importance, bank risk, and systemic risk

Cited by 3 publications

References 81 publications

Bank Stability and Systemic Risk Measurement

Bank Stability and Systemic Risk Measurement

The determinants of risk reporting during the period of adoption of Basel II Accord: evidence from the Portuguese commercial banks

Risk reporting: do country-level institutional forces really matter?

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