Risk governance and regulatory adjustments in the public commercial banks of OECD

IF 2 Q2 BUSINESS, FINANCE Journal of Financial Regulation and Compliance Pub Date : 2024-02-26 DOI:10.1108/jfrc-06-2023-0090

Muddassar Malik

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Abstract

Purpose

This study aims to explore the relationship between risk governance characteristics (chief risk officer [CRO], chief financial officer [CFO] and senior directors [SENIOR]) and regulatory adjustments (RAs) in Organization for Economic Cooperation and Development public commercial banks.

Design/methodology/approach

Using principal component analysis (PCA) and regression models, the research analyzes a representative data set of these banks.

Findings

A significant negative correlation between risk governance characteristics and RAs is found. Sensitivity analysis on the regulatory Tier 1 capital ratio and the total capital ratio indicates mixed outcomes, suggesting a complex relationship that warrants further exploration.

Research limitations/implications

The study’s limited sample size calls for further research to confirm findings and explore risk governance’s impact on banks’ capital structures.

Practical implications

Enhanced risk governance could reduce RAs, influencing banking policy.

Social implications

The study advocates for improved banking regulatory practices, potentially increasing sector stability and public trust.

Originality/value

This study contributes to understanding risk governance’s role in regulatory compliance, offering insights for policymaking in banking.

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经合组织公共商业银行的风险治理和监管调整

目的本研究旨在探讨经济合作与发展组织公共商业银行的风险治理特征（首席风险官、首席财务官和高级董事）与监管调整（RAs）之间的关系。对监管一级资本比率和总资本比率的敏感性分析表明，结果好坏参半，这表明两者之间存在复杂的关系，值得进一步探讨。研究局限性/启示研究的样本量有限，需要进一步研究，以确认研究结果并探讨风险治理对银行资本结构的影响。本研究有助于理解风险治理在监管合规中的作用，为银行业的政策制定提供启示。

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来源期刊

Journal of Financial Regulation and Compliance BUSINESS, FINANCE-

CiteScore

2.60

自引率

11.10%

发文量

期刊介绍： Since its inception in 1992, the Journal of Financial Regulation and Compliance has provided an authoritative and scholarly platform for international research in financial regulation and compliance. The journal is at the intersection between academic research and the practice of financial regulation, with distinguished past authors including senior regulators, central bankers and even a Prime Minister. Financial crises, predatory practices, internationalization and integration, the increased use of technology and financial innovation are just some of the changes and issues that contemporary financial regulators are grappling with. These challenges and changes hold profound implications for regulation and compliance, ranging from macro-prudential to consumer protection policies. The journal seeks to illuminate these issues, is pluralistic in approach and invites scholarly papers using any appropriate methodology. Accordingly, the journal welcomes submissions from finance, law, economics and interdisciplinary perspectives. A broad spectrum of research styles, sources of information and topics (e.g. banking laws and regulations, stock market and cross border regulation, risk assessment and management, training and competence, competition law, case law, compliance and regulatory updates and guidelines) are appropriate. All submissions are double-blind refereed and judged on academic rigour, originality, quality of exposition and relevance to policy and practice. Once accepted, individual articles are typeset, proofed and published online as the Version of Record within an average of 32 days, so that articles can be downloaded and cited earlier.