Is there any relationship among the risks of banks in Malaysia?
Banking sector is the backbone of any country’s economy and involves in the risky business activity. It is also highly regulated industry mainly due its high risky activities. Among the risks faced by the banks, operating risk, liquidity risk, credit risk and market risk are the major risk. The ob...
| Main Authors: | , |
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| Format: | Article |
| Language: | English English |
| Published: |
IDOSI Publication
2014
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/36464/ http://irep.iium.edu.my/36464/ http://irep.iium.edu.my/36464/1/Is_There_Any_Relationship_among_the_Risks_of_Banks_in_Malaysia.pdf http://irep.iium.edu.my/36464/5/36464_Is%20there%20any%20relationship%20among_SCOPUS.pdf |
| Summary: | Banking sector is the backbone of any country’s economy and involves in the risky business activity.
It is also highly regulated industry mainly due its high risky activities. Among the risks faced by the banks,
operating risk, liquidity risk, credit risk and market risk are the major risk. The objective of this study is to
examine the correlation among these risks in the context of locally owned banks in Malaysia. The data has been
collected from five listed banks for 10 years (2002-2011). Malaysian banking sector is chosen due to its unique
nature of banking environment which promotes Malaysia to be the hub of Islamic banking and finance and
which accommodate the dual banking system. Pearson correlation method is used to find out the relationship
among the risk. The findings show that the risk relation varies across the banks and it is difficult to generalize
the risk relationship nature in Malaysian banks. We suggest the banks need to manage the risks based on their
risk portfolio and risk appetite. These findings contribute to enhance the knowledge on risk behaviors and will
be the interest of regulators, investors and industrial players for future making rules, investment decision and
plan the risk management. |
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