Are Socially Responsible Banks More Risk Averse and Dividends Providers?Empirical Evidence from a Developing Economy

Purpose:This study examines whether socially responsible firms are uninterested in risk-taking and whether socially responsible banks are more dividend providers than socially irresponsible ones.We conducted the analysis using the least-squares method for 290-panel data observations of 32 commercial banks operating in Bangladesh from 2008 to 2018.Methodology:We employed Ordinary Least Squares Regression for 290-panel data observations of 32 commercial banks operating in Bangladesh from 2008 to 2018 using EViews software version-8.Moreover,we conducted descriptive analysis and correlations using SPSS software.We considered CSRI and CSRPI as the indicators of corporate social responsibility,dividend per share and stock dividend as a proxy of dividend policy,LEV(leverage),and non-performing loan to total loan as the indicators of financial risk,and lastly,Z score as the indicator of financial stability.Findings:Studies have shown that banks prioritizing social responsibility tend to pay dividends to their shareholders more frequently and consistently than banks that do not.In particular,banks that invest heavily in corporate social responsibility(CSR)tend to maintain a stable dividend payout,which can help address agency problems that arise from overinvestment in the CSR sector.Additionally,we found that banks that make huge expenditures on CSR also seem to have a low eagerness for risk-taking.Again,we found that the financial stability of a socially responsible bank is high and stable enough,which will help efficiently handle the bank’s financial risks,reduce price fluctuations,and increase financial assets that generally influence a bank’s monetary stability.Implications:Banks implementing fruitful CSR strategies can produce substantial shareholder advantages through high dividend payout levels.An expansion in CSR-related expenditure does not prompt a cut-down or reduce the portion of income paid out as dividends to shareholders.Therefore,the Output of our study will help provide critical information and a thorough understanding of corporate social responsibility and its association with the dividend policy,risk,and financial stability in the banking sector.This will also be useful to the researcher,students,and corporate policymakers while making a critical decision about whether a firm should make expenditures on CSR purposes,how it impacts a firm’s dividend decision,and its connection with its overall risk and financial stability.According to the study,corporate social responsibility should be integrated into a firm’s mission and strategy rather than appearing to be a mere act of generosity.Originality/Value:This study uniquely considers CSR,dividend policy,risk,and financial stability simultaneously in a developing country.Besides,the three-dimensional measures of CSR used in the research focused on developing the economy are a precious contribution.

The Effect of the 2007/2008 Financial Crisis on Enterprise Risk Management Disclosure of Top US Banks

We document the effect of the 2007/2008 financial crisis on the volume and the quality of enterprise risk management （ERM） disclosure in the annual reports of the largest US banks, and analyze its determinants. Using a content analysis approach of the annual reports form 10-K for the years 2006, 2007, 2008, and 2009, we find that the ERM disclosure is significantly and positively associated with the crisis, bank size, board independence, duality and significantly and negatively associated with profitability, leverage, and board size. This paper seeks to fill a gap in the literature by investigating the effect of the crisis on ERM disclosure in the US banking sector context, and gives an insight into the factors affecting risk disclosure practices during the financial crisis.

Big Data Audit of Banks Based on Fuzzy Set Theory to Evaluate Risk Level

The arrival of big data era has brought new opportunities and challenges to the development of various industries in China.The explosive growth of commercial bank data has brought great pressure on internal audit.The key audit of key products limited to key business areas can no longer meet the needs.It is difficult to find abnormal and exceptional risks only by sampling analysis and static analysis.Exploring the organic integration and business processing methods between big data and bank internal audit,Internal audit work can protect the stable and sustainable development of banks under the new situation.Therefore,based on fuzzy set theory,this paper determines the membership degree of audit data through membership function,and judges the risk level of audit data,and builds a risk level evaluation system.The main features of this paper are as follows.First,it analyzes the necessity of transformation of the bank auditing in the big data environment.The second is to combine the determination of the membership function in the fuzzy set theory with the bank audit analysis,and use the model to calculate the corresponding parameters,thus establishing a risk level assessment system.The third is to propose audit risk assessment recommendations,hoping to help bank audit risk management in the big data environment.There are some shortcomings in this paper.First,the amount of data acquired is not large enough.Second,due to the lack of author’knowledge,there are still some deficiencies in the analysis of audit risk of commercial banks.

Islamic Banks Impaired Financing： Relationship Between Shariah Committee Meetings Frequency and Shariah Risks Compliance on Assets Quality

This study made a pioneering attempt to econometrically examine what factors determining impaired financing using shariah committee meetings frequency from data on Islamic banks in Malaysia and how does it affects on the quality of assets. The objective of the study is to improve assessment of their assets quality so as to increase the reliability of the financial statements. The European Central Bank may find the findings from this study useful in their exercise to assess risks and assets quality of their commercial banks, a move to tackle the ailing banks in centralizing oversight supervision in late 2014. The major components of the Islamic banks＇ assets quality are impaired financing and provisions for financing impairment. In the Islamic banks, shariah committee principally manages the shariah risks non-compliance with other risks; however because their management is not straightforward, the study uses the shariah committee meetings frequency as an indicator of the assets quality. The study found the less-than-full frequency of shariah committee meetings resulted in less guidance and conformation of shariah principles, and consequentially the quality of the assets.

Application of the Credit Metrics in the Credit Risk Management of Commercial Banks

Credit risk is one of the main risks the commercial banks faces all over the world,especially in the risk structure of the banks of China.In order to control credit risk more scientifically,we shall connect the qualitative analysis and the quantitative analysis.Put forward by J.P.Morgan Credit Metrics model is the application of the VaR in the field of credit risk,showing great advantage in quantitative bonds and credit risk of loan.This paper studies the Credit Metrics model and analyzes the hypothesis and framework of this model,attempting to explore the application of the model in China in order to promote the realization of the risk quantification of the commercial banks of China.

Effectiveness of colorectal cancer screening integrating non-genetic and genetic risk: a prospective study based on UK Biobank data

Objective: Few studies have evaluated the benefits of colorectal cancer(CRC) screening integrating both non-genetic and genetic risk factors. Here, we aimed to integrate an existing non-genetic risk model(QCancer-10) and a 139-variant polygenic risk score to evaluate the effectiveness of screening on CRC incidence and mortality.Methods: We applied the integrated model to calculate 10-year CRC risk for 430,908 participants in the UK Biobank, and divided the participants into low-, intermediate-, and high-risk groups. We calculated the screening-associated hazard ratios(HRs) and absolute risk reductions(ARRs) for CRC incidence and mortality according to risk stratification.Results: During a median follow-up of 11.03 years and 12.60 years, we observed 5,158 CRC cases and 1,487 CRC deaths, respectively. CRC incidence and mortality were significantly lower among screened than non-screened participants in both the intermediateand high-risk groups [incidence: HR: 0.87, 95% confidence interval(CI): 0.81±0.94;0.81, 0.73±0.90;mortality: 0.75, 0.64±0.87;0.70, 0.58±0.85], which composed approximately 60% of the study population. The ARRs(95% CI) were 0.17(0.11±0.24) and 0.43(0.24±0.61), respectively, for CRC incidence, and 0.08(0.05±0.11) and 0.24(0.15±0.33), respectively, for mortality. Screening did not significantly reduce the relative or absolute risk of CRC incidence and mortality in the low-risk group. Further analysis revealed that screening was most effective for men and individuals with distal CRC among the intermediate to high-risk groups.Conclusions: After integrating both genetic and non-genetic factors, our findings provided priority evidence of risk-stratified CRC screening and valuable insights for the rational allocation of health resources.

Association of alcohol consumption with aortic aneurysm and dissection risk:results from the UK Biobank cohort study

BACKGROUND:Previous studies have reported inconsistent results with positive,negative,and J-shaped associations between alcohol consumption and the hazard of aortic aneurysm and dissection(AAD).This study aimed to examine the connections between weekly alcohol consumption and the subsequent risk of AAD.METHODS:The UK Biobank study is a population-based cohort study.Weekly alcohol consumption was assessed using self-reported questionnaires and the congenital risk of alcohol consumption was also evaluated using genetic risk score(GRS).Cox proportional hazards models were used to estimate hazard ratios(HRs)with 95% confidence intervals(CIs)for the associations between alcohol consumption and AAD.Several sensitivity analyses were performed to assess the robustness of the results.RESULTS:Among the 388,955 participants(mean age:57.1 years,47.4% male),2,895 incident AAD cases were documented during a median follow-up of 12.5 years.Compared with never-drinkers,moderate drinkers(adjusted HR:0.797,95%CI:0.646-0.984,P<0.05)and moderate-heavy drinkers(adjusted HR:0.794,95%CI:0.635-0.992,P<0.05)were significantly associated with a decreased risk of incident AAD.Interaction-based subgroup analysis revealed that the protective effect of moderate drinking was reflected mainly in participants younger than 65 years and women.CONCLUSION:Our findings support a protective effect of moderate alcohol consumption on AAD,but are limited to participants younger than 65 years and women.

A dynamic credit risk assessment model with data mining techniques:evidence from Iranian banks

Giving loans and issuing credit cards are two of the main concerns of banks in that they include the risks of non-payment.According to the Basel 2 guidelines,banks need to develop their own credit risk assessment systems.Some banks have such systems;nevertheless they have lost a large amount of money simply because the models they used failed to accurately predict customers’defaults.Traditionally,banks have used static models with demographic or static factors to model credit risk patterns.However,economic factors are not independent of political fluctuations,and as the political environment changes,the economic environment evolves with it.This has been especially evident in Iran after the 2008-2016 USA sanctions,as many previously reliable customers became unable to repay their debt(i.e.,became bad customers).Nevertheless,a dynamic model that can accommodate fluctuating politicoeconomic factors has never been developed.In this paper,we propose a model that can accommodate factors associated with politico-economic crises.Human judgement is removed from the customer evaluation process.We used a fuzzy inference system to create a rule base using a set of uncertainty predictors.First,we train an adaptive network-based fuzzy inference system(ANFIS)using monthly data from a customer profile dataset.Then,using the newly defined factors and their underlying rules,a second round of assessment begins in a fuzzy inference system.Thus,we present a model that is both more flexible to politico-economic factors and can yield results that are max compatible with real-life situations.Comparison between the prediction made by proposed model and a real non-performing loan indicates little difference between them.Credit risk specialists also approve the results.The major innovation of this research is producing a table of bad customers on a monthly basis and creating a dynamic model based on the table.The latest created model is used for assessing customers henceforth,so the whole process of customer assessment need not be repeated.We assert that this model is a good substitute for the static models currently in use as it can outperform traditional models,especially in the face of economic crisis.

Research on the Impact of the Digital Transformation of Commercial Banks

The development of the digital economy has presented both opportunities and challenges for the transformation of commercial banks.This article aims to conduct a literature review on the impact of digital transformation on commercial banks and to explore the multi-dimensional effects it brings.Through a review and analysis of relevant domestic and international literature,this paper first defines the connotation of digital transformation in commercial banks.It then conducts a literature analysis and research on the strategic governance,business performance,and risk management aspects of the digital transformation of commercial banks from multiple perspectives.Based on the analysis of the existing literature,the paper explores directions for future in-depth research and offers corresponding policy suggestions,providing a theoretical and practical foundation for the future digital development of commercial banks.

Systemic Risk of Conventional and Islamic Banks: Comparison with Graphical Network Models

The main aim of this paper is to compare the stability, in terms of systemic risk, of conventional and Islamic banking systems. To this aim, we propose correlation network models for stock market returns based on graphical Gaussian distributions, which allows us to capture the contagion effects that move along countries. We also consider Bayesian graphical models, to account for model uncertainty in the measurement of financial systems interconnectedness. Our proposed model is applied to the Middle East and North Africa (MENA) region banking sector, characterized by the presence of both conventional and Islamic banks, for the period from 2007 to the beginning of 2014. Our empirical findings show that there are differences in the systemic risk and stability of the two banking systems during crisis times. In addition, the differences are subject to country specific effects that are amplified during crisis period.

The New Approach for Risk Regulation in Banks

The purpose of this report is to present the necessity of proceeding to new reforms in bank regulation and to increase the stability and risk sensitivity of the capital base under applying the Standardised Credit Risk Assessment Approach (SCRA) in banks. The dynamics in the bank regulation and supervision of credit risk assessment approaches are explored. In the paper, a thorough theoretical-methodological and historical-logical analysis was made of the evolution of the development and chronology of the global regulatory frameworks for banks—Basel 1, Basel 2, and Basel 3. The contemporary projections and challenges for the banks’ management under the new regulatory and institutional changes are presented. The SCRA is a positive asset in bank capital regulation in contemporary banking. The revisions to the regulatory framework by Basel 3 are a long continuous process influenced by numerous economic, social, and political factors. The preparation of the Bulgarian banking system for a new reform of financial regulation is analyzed. The need for adoption of a new risk-based approach for capital assessment and the importance of transparency in bank financial reporting is proved.

Research on the Impact of Digital Transformation on the Business Performance of Commercial Banks

Nowadays,with the development of the digital economy,commercial banks are actively conducting digital transformation.Studying the impact of the digital transformation of commercial banks on their operating performance can help commercial banks form a stronger core competitiveness and promote high-quality financial development.Based on the above background,this article first describes the status and development of digital transformation and development of commercial banks,and secondly analyzes whether Chinese commercial banks’digital transformation is conducive to improving their operating performance.Thirdly,by selecting the data of the listed commercial banks in the ten years of 2012–2022,this article obtains the empirical testing of the digital transformation on different property rights.Finally,the higher the level of digitalization,the higher the digital level,the more significantly promotes the performance of commercial banks.Finally,based on the above analysis,this article puts forward feasibility opinions on commercial banks and related regulators.

Research Risk Factors and Management Competence of Vietnam Commercial Banks from 2006-2020

Banks are various credit institutions that perform all bank activities and other business activities. According to the nature and objectives of operation, types of banks include all the commercial banks, development banks, investment banks, policy banks, joint stock banks and other types of banks.

Stress Testing of Liquidity Maturity Transformation Risk in Banks

One of the main causes of the past crisis was the inability of financial institutions to acquire funding at appropriate costs.The importance of applying a good liquidity risk measurement system becomes apparent.The present paper provides an approach to the measurement of liquidity maturity transformation risk within a stress testing framework,for middle-sized banks.The costs of liquidity arising due to a downturn in refinancing conditions are calculated by using modern risk measures.The forward-looking way is based on a liquidity gap report,where the consideration of the counterbalancing capacity enables to gain an insight into the real liquidity needs.The measurement of both,the portfolio-value in the respective time bucket and liquidity costs,is possible.Applying the expected shortfall can easily be included into the calculation.The results show that by using historical simulation,if no sufficient data are available,expected shortfall delivers an approximate value.Still,it can serve as an indicator of insurance against extreme events.The present approach combines a scenario-based view to a possible distress with a quantitative risk measurement.Therewith,it contributes to the bank’s wide stress testing as required by the regulatory authorities.

Risk Factors of Commercial Banks in Malaysia

All kinds of risks exist in the banking industry. In order to cover these exposures, banks must manage these risk factors for better survival in any state of uncertainty. The objective is to examine the relevant risk factors that will affect the sensitivity of commercial banks in Malaysia. These factors are liquidity and interest rate risk, credit risk, market risk, operating and country risk, and exchange rate risk. A survey is conducted to solicit the appropriate factors that will influence the sensitivity of banks. Factor analysis is then used to identify the factors and a regression model is used to establish the associations. The results obtained through this research would be beneficial in constructing an effective solution or strategy to enable banks to minimize risk and possible failure in times of adversity.

The Relationship Between Credit Risk Management and Profitability Among the Commercial Banks in Kenya

Banks operate in an environment of considerable risks and uncertainty. Credit risk has always been a vicinity of concern not only to bankers but to all in the business world because the risks of a trading partner not fulfilling his obligations in full on due date can seriously jeopardize the affairs of the other partner. Credit risk management in banks has become more important not only because of the series of financial crisis that the world has experienced in the recent past, but also the introduction of Basel II Accord. The objective of the study was to establish the relationship between credit risk management and profitability in commercial banks in Kenya, Both qualitative and quantitative methods were used in order to fulfill the main purpose of the study. A regression model was used to do the empirical analysis. The results obtained from the regression model show that there is an effect of credit risk management on profitability at a reasonable level. The findings and analysis reveal that credit risk management has an effect on profitability in all the commercial banks analyzed.

The Construction of Risk Management Control System for Commercial Banks： From the Perspective of the Management Team

Risk management control （RMC） system is of vital importance to firms, especially the commercial banks. However, the existing models of risk management are always built from the perspective of financial regulators and neglect the practicability within the organization. In order to better facilitate the enterprise risk management （ERM）, this paper is trying to construct a new framework of RMC system from the standpoint of the management team. The foundations of our design are COSO ERM report, as well as multi-disciplinary theories and methods, such as economy, psychology, and behavior. We establish a three-component RMC system for commercial banks, which include setting RMC standards, monitoring RMC execution, and rewarding results from standards execution. Then, we introduce an extended three-factor RMC system model. This system and its extended framework are meaningful and referential for both theory and practice of commercial banks＇ risk management.

Risk Control Strategies for Loan of Commercial Banks to Small Agricultural Enterprises

In recent years,the deepening of reform has provided larger development space for small agricultural enterprises. Besides,with flexible operation mechanism and sensitive market perception,small agricultural enterprises have also enriched the reform achievements,improved the market structure and promoted economic development. Therefore,attaching great importance to small agricultural enterprises and supporting their healthy development have become the key tasks of each country. However,at the current stage,small agricultural enterprises in China are facing tremendous survival pressure. Because their capital is limited,the capital turnover is difficult. In this situation,financing has become an important means for small agricultural enterprises to revitalize the capital chain,expand the scale,and ensure normal operation.Compared with large and medium sized enterprises,small agricultural enterprises are small in size,imperfect in operation system,and weak in the ability of coping with market risks. Thus,commercial banks take on more risks when lending to small agricultural enterprises. To cater to state policies,commercial banks have to lend to small agricultural enterprises. In this process,it is particularly important for commercial banks to control risks. Taking some commercial banks in Xiangyang City of Hubei Province as an example,this paper analyzed the loan contracts provided by commercial banks for small agricultural enterprises and the investigation of financial status and credit status of loans before and after lending. It is found that commercial banks seldom check the financial statements when checking the operation status of small agricultural enterprises. They just check electricity fees,water fees,and wages,which are real-time and provided by the authority to accurately grasp the operation conditions. It has also been found that commercial banks will ensure that enterprises can possess the capital flow to reduce loan risks through requiring enterprises to set up fund withdraw accounts,and taking accounts receivable of enterprises as pledges.

Research on Systemic Risk Spillover Effect of Chinese Listed Commercial Banks——Based on Quantile CoVaR Model

The banking industry plays an important role in China's financial market, and the systemic risk of the banking industry has astrong risk spillover effect. This paper measures the systemic risk spillover effect of Chinese listed commercial banks byconstructing the quantile CoVaR model. The study concluded that when an extreme risk event occurs, the overall risk spillovereffect of a single bank on the banking system is greater than the risk spillover effect of the banking system on a single bank, thevalue of VaR is smaller than the actual risk value when measuring the risk value of commercial banks and the CoVaR model ismore accurate in measuring systemic risk.

Credit Risk Transfer and the Performance of Commercial Banks --Based on the Panel Data

Based on the panel data, we analyze the US commercial banks＇ CRT. According to the study, we find that the introduction of CRT will increase the level of banks＇ liquid risk. The performance of bank mainly is that its supervision and review of risk will drop, based on the impact of asymmetric information, commercial Banks transfer the bad loans to investors. Through the analysis we can see that after the transfer of credit risk in commercial bank did not increase income and reduce risk. Because commercial Banks can extend more bad loans to expand its lending scale, and bad loans will increase the bank overall risk.