Compliance Risk and Loan Quality in Banks
碩士 === 國立高雄第一科技大學 === 金融系碩士班金融組 === 103 === Compliance risk is defined as the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, an...
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| Format: | Others |
| Language: | zh-TW |
| Published: |
2015
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| Online Access: | http://ndltd.ncl.edu.tw/handle/54282883484794487328 |
| Summary: | 碩士 === 國立高雄第一科技大學 === 金融系碩士班金融組 === 103 === Compliance risk is defined as the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to its banking activities. Compliance risk control is an important dimension of banks’ management which is strongly related to asset quality. This paper examines the influence of banks’ events of compliance risk on loan quality. A sample consists of 31 banks from Taiwan over the period 2004 to 2013. The results of our analysis show that compliance risk events are positively related to non-performing loans. We also find that decreases in measured cost efficiency are generally followed by increases in non-performing loans. These findings provide support for the bad management hypothesis. In addition, we find good management is critical for small banks and periods of financial crisis to maintain quality of loans.
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