Bank risk exposures in the East Asian Region

Alireza Tamadonnejad, Aisyah Abdul Rahman, Mariani Abd Majid, Mansor Jusoh

Research output: Contribution to journalArticle

Abstract

Risk management is a pivotal factor for managing financial institutions. Efficient and sustainable banking activity requires managers to take all sources of instability into account and to adopt strategies against risks. The objective of the present paper is to investigate the sources of bank risks with a straightforward and comprehensive risk measurement for the East Asian region. The Z-risk index and a three-factor Capital Asset Pricing Model (CAPM) are adopted to estimate the probability of insolvency, systematic bank risks and unsystematic bank risks. The results demonstrate that banks in East Asian countries are exposed to a variety of risk exposures. Also, the findings show that banks with lower unsystematic risks do not necessarily have lower insolvency risks, indicating that the sources of insolvency risk are complicated and need further research. Finally, a regional cooperation strategy among banks is suggested so that exchange rate and interest rate risks can be reduced.

Original languageEnglish
Pages (from-to)83-89
Number of pages7
JournalJurnal Pengurusan
Volume40
Publication statusPublished - 2014

Fingerprint

Asia
Risk exposure
Bank risk
Insolvency risk
Factors
Regional cooperation
Insolvency
Exchange rates
Asian countries
Risk measurement
Interest rate risk
Managers
Financial institutions
Banking
Risk management
Capital asset pricing model

Keywords

  • Debt market
  • East Asian banks
  • Foreign exchange market
  • Insolvency risk
  • Stock market
  • Three-factor CAPM

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Accounting
  • Business and International Management

Cite this

Bank risk exposures in the East Asian Region. / Tamadonnejad, Alireza; Abdul Rahman, Aisyah; Abd Majid, Mariani; Jusoh, Mansor.

In: Jurnal Pengurusan, Vol. 40, 2014, p. 83-89.

Research output: Contribution to journalArticle

Tamadonnejad, Alireza ; Abdul Rahman, Aisyah ; Abd Majid, Mariani ; Jusoh, Mansor. / Bank risk exposures in the East Asian Region. In: Jurnal Pengurusan. 2014 ; Vol. 40. pp. 83-89.
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