Internal Performance versus ExternalPerformance Of Banks in Taiwan

• Main Authors: Jhih-Chang Lai, 賴志昌
• Other Authors: Chang- Chiun Cheng
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/s56a9m

碩士 === 銘傳大學 === 財務金融學系碩士班 === 94 === Basel II will be implemented in 2006. After that the management of the risk will turn into an important issue in finance. But the traditional index such as ROA or ROE, both are not take the risk into account. Hence, this paper hope to adapt an index which considerate the risk of the bank in order to comply with the Basel II, like RAROC. It can correct the wrong concept in the past, and be used to measure the internal performance of the bank .The main purpose of this paper is to discuss the relation between the internal performance index - RAROC and the external performance index – the risk premium of the stock price. The empirical result is that RAROC is irrelevant with the risk premium of the stock price; but there are significantly positive relation between traditional indexes and the risk premium of the stock price. It implied that the investors did not notice the importance of the risk. Secondly, the risk premium of the stock price of the banks in holding companies is worse than the other banks. It means that it does not synergy in the beginning of the holding companies. Third, the main bank of the holding companies is the worst in the risk premium of the stock price. Forth, the market factors of the stock price and the recycle of the economic are significant positive relation to the risk premium of stock price.