Karyani, Etikah and Dewo, Setio Anggoro and Kolade, Oluwaseun Risk governance, market competition and operational risk disclosure quality: a study of the ASEAN-5 banking sector. Journal of Operational Risk, 16 (2). ISSN ISSN: 1744-6740 (print) 1755-2710 (online)
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Abstract
This paper investigates the impact of risk governance and market competition on banks' operational risk disclosure (ORD) quality (total and voluntary) in the Association of Southeast Asian Nations (ASEAN-5) banking sector. Using 285 firm-year observations encompassing the period 2010–14 for risk governance indexes, we investigate the moderating effects of market competition, relative to total risk governance practices, on banks' ORD quality. The results of our panel data analysis show that there is a substitution effect of competition, which could reduce the adverse consequences of weak risk governance practices. However, governance factors – such as the chief risk officer's (CRO's) role and independence, and the risk communication system – decrease voluntary ORD quality. These findings have implications for the role of the financial regulator in using market competition as an effective mechanism to replace banks' weak risk governance, thus encouraging banks to improve their ORD quality. This study contributes to existing knowledge by providing new empirical insights into ongoing debates about the complementary or substitutionary role of competition policies and corporate governance practices.
| Item Type: | Article |
|---|---|
| Subjects: | H Social Sciences > HF Commerce > HF5001 Business H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance |
| Depositing User: | Mrs. Etikah Karyani |
| Date Deposited: | 03 Sep 2021 08:21 |
| Last Modified: | 03 Sep 2021 08:21 |
| URI: | http://repository.ibs.ac.id/id/eprint/3314 |
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