Risk management and bank performance: evidence from the MENA region
Purpose The credit crunch of 2008 and recent COVID-19 influences underscored the importance of liquidity and credit risk management in businesses and financial institutions. The purpose of this study is to investigate the impact of liquidity risk and credit risk management on accounting and market p...
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| Format: | article |
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2022
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| Online Access: | http://hdl.handle.net/10725/14995 https://doi.org/10.1108/JFRA-07-2021-0189 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2021-0189/full/html |
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| _version_ | 1864513470110629888 |
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| author | Harb, Etienne |
| author2 | El Khoury, Rim Mansour, Nadia Daou, Rima |
| author2_role | author author author |
| author_facet | Harb, Etienne El Khoury, Rim Mansour, Nadia Daou, Rima |
| author_role | author |
| dc.creator.none.fl_str_mv | Harb, Etienne El Khoury, Rim Mansour, Nadia Daou, Rima |
| dc.date.none.fl_str_mv | 2022 2022-01-20 2023-09-04T12:00:48Z 2023-09-04T12:00:48Z |
| dc.identifier.none.fl_str_mv | 1985-2517 http://hdl.handle.net/10725/14995 https://doi.org/10.1108/JFRA-07-2021-0189 Harb, E., El Khoury, R., Mansour, N., & Daou, R. (2022). Risk management and bank performance: evidence from the MENA region. Journal of Financial Reporting and Accounting. http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2021-0189/full/html |
| dc.language.none.fl_str_mv | en |
| dc.relation.none.fl_str_mv | Journal of Financial Reporting and Accounting |
| dc.rights.*.fl_str_mv | info:eu-repo/semantics/openAccess |
| dc.title.none.fl_str_mv | Risk management and bank performance: evidence from the MENA region |
| dc.type.none.fl_str_mv | Article info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/article |
| description | Purpose The credit crunch of 2008 and recent COVID-19 influences underscored the importance of liquidity and credit risk management in businesses and financial institutions. The purpose of this study is to investigate the impact of liquidity risk and credit risk management on accounting and market performances of banks operating in the Middle East and North Africa (MENA) region. Design/methodology/approach This study uses a panel data regression analysis on a sample of 51 listed commercial banks operating in 10 MENA countries during the period 2010–2018. Findings The results show that credit risk management does not affect the accounting performance of banks, while it has a non-linear, convex relationship with market performance. Surprisingly, liquidity risk management is not a significant driver for either performance measure in studied banks. However, when a bank combines credit risk management with liquidity risk management efforts, liquidity risk management actions return significant results on both performances, illustrated by an inverted U-shaped relationship. In addition, this study examines the joint impact of both risks on bank performance. This study reveals that accounting and market performances are differently affected by joint risk management efforts. Their impact depends on the combination of risk management ratios upon which banks choose to focus their efforts. Practical implications The findings help bankers and regulators further consider non-linearities and offer them new tools for managing the impact of credit and liquidity risk interactions towards achieving more financial stability. Originality/value These results contribute to traditional banking in offering bankers and regulators new tools for managing the impact of credit and liquidity risk interactions on bank performance. |
| eu_rights_str_mv | openAccess |
| format | article |
| id | LAURepo_83e6d4b6cd5cfd871068530044f259ee |
| identifier_str_mv | 1985-2517 Harb, E., El Khoury, R., Mansour, N., & Daou, R. (2022). Risk management and bank performance: evidence from the MENA region. Journal of Financial Reporting and Accounting. |
| language_invalid_str_mv | en |
| network_acronym_str | LAURepo |
| network_name_str | Lebanese American University repository |
| oai_identifier_str | oai:laur.lau.edu.lb:10725/14995 |
| publishDate | 2022 |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| spelling | Risk management and bank performance: evidence from the MENA regionHarb, EtienneEl Khoury, RimMansour, NadiaDaou, RimaPurpose The credit crunch of 2008 and recent COVID-19 influences underscored the importance of liquidity and credit risk management in businesses and financial institutions. The purpose of this study is to investigate the impact of liquidity risk and credit risk management on accounting and market performances of banks operating in the Middle East and North Africa (MENA) region. Design/methodology/approach This study uses a panel data regression analysis on a sample of 51 listed commercial banks operating in 10 MENA countries during the period 2010–2018. Findings The results show that credit risk management does not affect the accounting performance of banks, while it has a non-linear, convex relationship with market performance. Surprisingly, liquidity risk management is not a significant driver for either performance measure in studied banks. However, when a bank combines credit risk management with liquidity risk management efforts, liquidity risk management actions return significant results on both performances, illustrated by an inverted U-shaped relationship. In addition, this study examines the joint impact of both risks on bank performance. This study reveals that accounting and market performances are differently affected by joint risk management efforts. Their impact depends on the combination of risk management ratios upon which banks choose to focus their efforts. Practical implications The findings help bankers and regulators further consider non-linearities and offer them new tools for managing the impact of credit and liquidity risk interactions towards achieving more financial stability. Originality/value These results contribute to traditional banking in offering bankers and regulators new tools for managing the impact of credit and liquidity risk interactions on bank performance.Published2023-09-04T12:00:48Z2023-09-04T12:00:48Z20222022-01-20Articleinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article1985-2517http://hdl.handle.net/10725/14995https://doi.org/10.1108/JFRA-07-2021-0189Harb, E., El Khoury, R., Mansour, N., & Daou, R. (2022). Risk management and bank performance: evidence from the MENA region. Journal of Financial Reporting and Accounting.http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.phphttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2021-0189/full/htmlenJournal of Financial Reporting and Accountinginfo:eu-repo/semantics/openAccessoai:laur.lau.edu.lb:10725/149952024-07-04T11:21:16Z |
| spellingShingle | Risk management and bank performance: evidence from the MENA region Harb, Etienne |
| status_str | publishedVersion |
| title | Risk management and bank performance: evidence from the MENA region |
| title_full | Risk management and bank performance: evidence from the MENA region |
| title_fullStr | Risk management and bank performance: evidence from the MENA region |
| title_full_unstemmed | Risk management and bank performance: evidence from the MENA region |
| title_short | Risk management and bank performance: evidence from the MENA region |
| title_sort | Risk management and bank performance: evidence from the MENA region |
| url | http://hdl.handle.net/10725/14995 https://doi.org/10.1108/JFRA-07-2021-0189 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2021-0189/full/html |