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Corporate Governance, Capital Reserve, Non-Performing Loan, and Bank Risk Taking

Author

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  • Diyan Lestari

    (Institut Teknologi dan Bisnis Kalbis, Jakarta, Indonesia.)

Abstract

This study aim to analyze the effect of corporate governance, bank capital reserve, and NPL on bank risk taking which listed in Indonesia Stock Exchange from 2009 to 2016. The corporate governance represent management decision making and bank management policy related to risk and other banking issue. While capital reserve and non-performing loan indicate bank financial performace. Capital reserve is important indicator for bank compare to its risky activities, and non-performing loan will give bank information about bank effectivity in lending behavior. The result of this study show that ownership concentration, the big four audit committee, and non-performing loan has negative effect on bank risk taking behavior. While capital reserve is not statistically significant on bank risk taking.

Suggested Citation

  • Diyan Lestari, 2018. "Corporate Governance, Capital Reserve, Non-Performing Loan, and Bank Risk Taking," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 25-32.
    • Handle: RePEc:eco:journ1:2018-02-4
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    References listed on IDEAS

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    Cited by:

    1. Nguyen Kim Quoc Trung, 2021. "The relationship between internal control and credit risk – The case of commercial banks in Vietnam," Cogent Business & Management, Taylor & Francis Journals, vol. 8(1), pages 1908760-190, January.
    2. Neema Mori & Godfrey Ng’urah, 2020. "The Influence of Relationship Lending on SMEs Loan Repayment Performance," Emerging Economy Studies, International Management Institute, vol. 6(2), pages 166-178, November.
    3. Lee, Chien-Chiang & Wang, Yurong & Zhang, Xiaoming, 2023. "Corporate governance and systemic risk: Evidence from Chinese-listed banks," International Review of Economics & Finance, Elsevier, vol. 87(C), pages 180-202.
    4. Quoc Trung Nguyen Kim, 2022. "The Effect of Agency Problem and Internal Control on Credit Risk at Commercial Banks in Vietnam," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 13(1), pages 1-22, January.

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    More about this item

    Keywords

    corporate governance; capital reserve; non-performing loan; bank risk taking;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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