Risk Early-Warning Method for Natural Disasters Based on Integration of Entropy and DEA Model

Risk early-warning of natural disasters is a very intricate non-deterministic prediction, and it was difficult to resolve the conflicts and incompatibility of the risk structure. Risk early-warning factors of natural disasters were differentiated into essential attributes and external characters, and its workflow mode was established on risk early-warning structure with integrated Entropy and DEA model, whose steps were put forward. On the basis of standard risk early-warning DEA model of natural disasters, weight coefficient of risk early-warning factors was determined with Information Entropy method, which improved standard risk early-warning DEA model with non-Archimedean infinitesimal, and established risk early-warning preference DEA model based on integrated entropy weight and DEA Model. Finally, model was applied into landslide risk early-warning case in earthquake-damaged emergency process on slope engineering, which exemplified the outcome could reflect more risk information than the method of standard DEA model, and reflected the rationality, feasibility, and impersonality, revealing its better ability on comprehensive safety and structure risk.

New Basle Capital Agreement and Risk Management of China＇s Banking Industry

Adjustment of Basle Capital Agreement will influence the risk management and capital arrangement demand of the banks with different scales, operation level and environment. It will have widespread and profound effect on the competition strength of every country＇s banks in the global market. Starting with illustration of the present cond（tion of risk management in China＇s banks, the paper analyzes the major problems existing in the risk management system of China＇s banking industry, then puts forward some clues and suggestions to improve and better the risk management system of China＇s banking industry.

Does country risk impact the banking sectors’non‑performing loans?Evidence from BRICS emerging economies

This study aims to fill the gap in the literature by specifically investigating the impact of country risk on the credit risk of the banking sectors operating in Brazil,Russia,India,China,and South Africa(BRICS),emerging countries.More specifically,we explore whether the country-specific risks,namely financial,economic,and political risks significantly impact the BRICS banking sectors’non-performing loans and also probe which risk has the most outstanding effect on credit risk.To do so,we perform panel data analysis using the quantile estimation approach covering the period 2004–2020.The empirical results reveal that the country risk significantly leads to increasing the banking sector’s credit risk and this effect is prominent in the banking sector of countries with a higher degree of non-performing loans(Q.25=−0.105,Q.50=−0.131,Q.75=−0.153,Q.95=−0.175).Furthermore,the results underscore that an emerging country’s political,economic,and financial instabilities are strongly associated with increasing the banking sector’s credit risk and a rise in political risk in particular has the most positive prominent impact on the banking sector of countries with a higher degree of non-performing loans(Q.25=−0.122,Q.50=−0.141,Q.75=−0.163,Q.95=−0.172).Moreover,the results suggest that,in addition to the banking sectorspecific determinants,credit risk is significantly impacted by the financial market development,lending interest rate,and global risk.The results are robust and have significant policy suggestions for many policymakers,bank executives,researchers,and analysts.

Risk Management in On-Line Banking

In the context of goal setting, the more difficult the goal, given feedback on performance, the more focused is individuals’ attention and persistence to accomplish the goal and in turn, their performance is also improved. Similarly, when the goal is multi-complex and performance time constraint, the deployment of specific strategies maybe the best approach developed. In effect of the above, this investigation takes a socio-psychological and organizational perspective in setting information systems (IS) security goals. In doing so, three important issues of goal setting are identified, these are: trust, culture and risk communication. Since system security breaches are still on the rise, the performance of managing such online risks is not the one expected. The framework suggested in this paper aims to contribute to socio-psychological and organizational values by enhancing the performance of the IS risk management process with a focus on security risks.

The risk early-warning of gas hazard in coal mine based on Rough Set-neural network

This article proposed the risk early-warning model of gas hazard based on Rough Set and neural network. The attribute quantity was reduced by Rough Set, the main characteristic attributes were withdrawn, the complexity of neural network system and the computing time was reduced, as well. Because of fault-tolerant ability, parallel processing ability, anti-jamming ability and processing non-linear problem ability of neural network system, the methods of Rough Set and neural network were combined. The examples research indicate： applying Rough Set and BP neural network to the gas hazard risk early-warning coal mines in coal mine, the BPNN structure is greatly simplified, the network computation quantity is reduced and the convergence rate is speed up.

Role of National Culture of Foreign Investors in the Area of Credit Risk Management： Case Study of Polish Banking Industry

Among the researches dedicated to the risk management in banks, there are not many analyses made from cultural point of view. The author attempts to assess the attitude to credit risk in the Polish banking system, in terms of cultural factors influencing the approach to this issue. The purpose of this paper is focused on testing the hypothesis that foreign owners of banks （headquarters） transfer elements of their national culture to its subsidiaries operating in Poland. It is done by analysis of statistical correlations between the indexes defining the main characteristics of national cultures and the actual financial performance indicators reached by selected banks in the period from 2004 to 2010 in Poland. The study objectives are the following： Firstly, whether the owners from different countries transfer their cultural attitude to risk to subordinate daughter-banks in Poland. The second question concerns the relevance of uncertainty avoidance and individualism/collectivism concepts of two, to some extent, competing approaches. The findings say that the regularity of the transfer of the cultural attitude to credit risk from the parent banks to their subsidiaries is confirmed by interviews with senior managers, but it is only partially reflected in the statistics. Main outcomes of the study propose that the cultural factors of bank risk management policy shouldn＇t be ignored and developed in other cross-cultural research areas, e.g. ethnocentrism. Generally, these studies are present lessons for companies, investors, and policymakers, but the usefulness of these implications varies.

The Empirical Estimation of the Influence of Credit Risk Determinants in Baltic States＇ Banking Sector

There have been investigated empirically the influence of macroeconomic and real estate market variables on the level of non-performing loans in the Baltic States. A secondary goal was to analyze the effect of constant loan portfolio growth on the level of non-performing loans in mentioned countries and to define the type of influence of the variables （i.e., long-term or short-term）. The research indicates that all variables except the growth rate of the real estate market （RRE） have long-term influence on the level of non-performing loans. RRE has short-term influence and variables influence is associated with the development of another variables. The influence of RRE played an important role, but it was not as crucial as it has been previously assumed. If a respective credit risk management is applied, the influence of RRE is to be eliminated. The research results indicate that the most significant reason for the growth of non-performing loans for the Baltic States presented by rapid growth of aggregated loan portfolio and unemployment rate. The increasing influence of rapid loan portfolio growth proves the assumption that banks＇ credit risk management policies underestimated the changes in the macroeconomic variables during the analyzed period. The changes in the real GDP had initial influence on the economic situation deterioration for Baltic States.

The Value Choice for Legal Regulation of Financial Risks in Shadow Banking

It is of vital importance for shadow banking supervision to have correct targets for the curtailment of financial risks.In fact,the process of selecting legal regulation targets for shadow banking financial risks is equivalent to a process of achieving specific goals or objectives by means of legal regulation.The establishment of a regulatory system for shadow banking should consider the objective and practical needs of the sector,prioritize security as the desired value,and reasonably establish a value system for risk control.

Central bank digital currency,loan supply,and bank failure risk:a microeconomic approach

Central bank digital currencies(CBDCs),which are legal tenders in digital form,are expected to reduce currency issuance and circulation costs and broaden the scope of monetary policy.In addition,these currencies may also reduce consumers’need for conventional demand deposits,which,in turn,increases banks’loan provision costs because deposits require higher rates of return.We use a microeconomic banking model to investigate the effects of introducing an economy-wide,account-type CBDC on a bank’s loan supply and its failure risk.Given that a CBDC is expected to lower the cost of liquidity circulation and become a strong substitute for demand deposits,both the loan supply and the bank failure risk increase.These increases are countered by subsequent increases in the rates of return on term deposits and loans,which,in turn,reduce the loan supply and thus bank failure risk.These offsetting forces lead to no significant change in banking,as long as the rate of return on loans is below a certain threshold.However,once the rate is above the threshold,bank failure risk increases,thereby undermining banking stability.The problem is more pronounced when the degree of pass-through of funding costs to the loan rate is high and the profitability of a successful project is low.Our results imply that central banks wishing to introduce an economy-wide,account-type CBDC should first monitor yields on bank loans and consider policy measures that induce banks to maintain adequate liquidity reserve levels.

Intelligent Decision Support System for Bank Loans Risk Classification

Intelligent Decision Support System (IISS) for Bank Loans Risk Classification (BLRC), based on the way of integration Artificial Neural Network (ANN) and Expert System (ES), is proposed. According to the feature of BLRC, the key financial and non-financial factors are analyzed. Meanwhile, ES and Model Base (MB) which contain ANN are designed . The general framework,interaction and integration of the system are given. In addition, how the system realizes BLRC is elucidated in detail.

Designing of Commercial Bank Loans Risk Early Warning System Based on BP Neural Networks

According to the index early warning method, a commercial bank loans risk early warning system based on BP neural networks is proposed. The warning signal is mainly involved with the financial situation signal of loaning corporation. Except the structure description of the system structure the demonstration of attemptive designing is also elaborated.

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.

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 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.