Annotated Bibliography on Enterprise Risk Management(ERM) in Banking

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ANNOTATED BIBLIOGRAPHY ON ERM IN BANKING

Chuang, Y. W., Lin, C. Y., Shih, J. Y., & Tsai, W. C. (2017). The Value of Implementing Enterprise Risk Management: Evidence from Taiwan's Financial Industry

This piece of work examines how the relationship between ERM implementation with the firm value among financial firms in an Asia developing market from 2001 to 2016. It also examines whether alterations in cost revenue effectiveness across businesses can be expounded by ERM adoption. The main argument of this article was to determine whether firms in Taiwan’s financial industry get any assistance from enterprise risk management (ERM) implementation. Another point of concern of this article is to determine how much value enterprise risk management activity makes. This source is useful because it shows that financial company implementing ERM is beneficial to the users. Out of the results of the study carried out shows that one benefits by adding value compared to non-users. The article is objective since it elaborates how the adoption of enterprise risk management aids firms to improve its revenue and cost efficiencies. In my piece of work, I will use this article to show that on the financial industry the banks and property/liability (P/L) brokers embracing ERM produce more welfares in cost savings and revenue efficacy.

Liem, C. (2018). Enterprise Risk Management In Banking Industry. Firm Journal of Management Studies, 3(1), 1-15.

Enterprise Risk Management in Banking Industry is an article which was written by Liem in the year 2018. The main aim of this article was to evaluate ERM implementation during the early phase of the ERM execution guideline in Indonesian, specifically its effect on bank performance and vice versa. This article is vital to use in my research for it involves the concentration of the 4 (four) state-owned commercial banks in Indonesia is involved which include; Bank Mandiri (BM), Bank Negara Indonesia, Bank Rakyat Indonesia. The use of these four types of banks will help to show how Enterprise Risk Management in banking. The study in this article has employed the use of ERM Index which is being used as a proxy of ERM implementation at the same time making a presentation of the bank performance is presented by 3 proxies which are NIM, ROAA, and EM. This is a useful source for it helps us to get to know how state-owned commercial banks have positive ERM Index. This source will be of great help in my piece of work for it will enable me to get to know the different maturity stage of ERM implementation. The article is reliable for it recognizes that ERM Index has affirmative important impact concerning ROAA and vice versa; ERM Index has an affirmative but irrelevant impact towards NIM and vice versa while at the same time ERM index has a positive but insignificant influence towards EM. The article is objective for it suggests to all profitmaking banks in Indonesia to implement ERM extremely for it has been confirmed that ERM execution conveys positive impact towards bank productivity and it conveys a positive signal to stockholders.

Lundqvist, S. A., & Vilhelmsson, A. (2018). Enterprise Risk Management and Default Risk: Evidence from the Banking Industry. Journal of Risk and Insurance, 85(1), 127-157.

https://doi.org/10.1111/jori.12151

The main point of argument of this article is that Enterprise risk management (ERM) has developed as an agenda for more universal and joined risk administration with an importance on the enhanced power of the risk administration system. The aim of writing this piece of work is to show how ERM should hypothetically lessen the unpredictability of cash flows, intervention risk, and information risk eventually reducing a firm’s default risk. The article summaries ways in which a rich set of control variables and fixed properties are involved, a one-standard-deviation upsurge in the extent of ERM implementation declines CDS spreads by some basic facts. The usefulness of this article is seen when the article discusses on association among the degree of ERM execution and avoidance risk in a board dataset wrapping the world’s largest sets. The use of this piece of work will be of great help to my research paper for it shows how there is a higher mark of ERM execution is negatively associated to the credit avoidance swap (CDS) extent of a bank.

Meinert, M. C. (2018). Embracing ERM at Community Banks. American Bankers Association. ABA Banking Journal, 110(1), 28-29.

Embracing ERM at Community Banks is a journal written by Meinert in the year 2018. The author Meinert argues that regulatory focus is upsurging around enterprise risk management and the controllers are expecting banks of all sizes to have a framework in areas of assessing and evaluating risk across the entire firm. Another point of an argument is through the various ways which have been utilized by the author to show how the whole idea of enterprise risk management lasts to be pressed down to smaller and smaller institutions. This source is of great help in my research work for it shows how bankers can settle on is that controlling focus is accumulating around enterprise risk management.

Soliman, A., & Mukhtar, A. (2017). Enterprise Risk Management and firm performance: an integrated model for the banking sector. Banks and Bank Systems.

http://dx.doi.org/10.21511/bbs.12(2).2017.12

The main aim of this article is to show how the enactment of Enterprise Risk Management database influences the performance of firms using an Enterprise Risk Management typical for the banking section and a combined model for measuring Enterprise Risk Management catalog. The article consists of ten listed commercial banks which were designated with the Enterprise Risk Management index as the chief free variable, with Return on Average Equity (ROAE), Share Price Return (SPR) and Firm Value (FV) which were used as three distinct dependent variables. This study is vital and relevance for my paper for it offers strong proof of a positive association between Enterprise Risk Management implementation and performance in the Nigerian banking segment. The article shows how there is an interaction between the banking industry and Enterprise Risk Management. The conclusions and deductions of this study are reliable with those of other readings in that they used data from diverse industries, offering a foundation from which to simplify the discoveries from this reading to firms in other businesses.

Zeghal, D., & El Aoun, M. (2016). The effect of the 2007/2008 financial crisis on enterprise risk management disclosure of top US banks. Journal of Modern Accounting and Auditing, 12(1), 28-51.

doi: 10.17265/1548-6583/2016.01.003

Zeghal and Aoun points of arguments are that documentation of consequences of the 2007/2008 financial disaster on the capacity and the superiority of enterprise risk management (ERM) revelation in the annual reports of the principal US banks, and examine its causes. The main findings which are relevant for my paper are that via the usage of a content analysis method of the annual intelligence form 10-K for the years 2006, 2007, 2008, and 2009 shows that the ERM expose is considerably and confidently linked with the disaster, bank size, board individuality, dualism and meaningfully and negatively linked with profitability, power, and board size. Another reason for carrying out this study was to prove that the acceptance of ERM, really, offers some profits to firms comprising development in presentation measures. This article is relevant for it pursues to fill a gap in the works by exploring the consequence of the crisis on ERM revelation in the US banking sector background, and contributes to an understanding into the features affecting risk disclosure performs during the economic crisis.

Zéghal, D., & El Aoun, M. (2016). Enterprise Risk Management in the US Banking Sector Following the Financial Crisis. Modern Economy, 7(04), 494.

http://dx.doi.org/10.4236/me.2016.74055

The aim of this paper was to examine the effect of the monetary crisis on the administration of risk in the prevalent US banks. This paper is important for it shows how the subprime monetary crisis had meaningfully affected the levels of risk contact and its significances after the crisis. The benefit of this paper is there are slight but important fluctuations in the ERM approaches after the crisis for the three major groups of risk examined in this study. The three major groups of risks discussed here are financial, business and strategic. This source of work is exceptional from other sources for it gives the various alterations in ERM strategies which are not important for risks inspected separately with the exclusion of credit risk. This study is principally appropriate for standards setters and regulatory organizations for it shelters light on the susceptibility of banks to certain kinds of risks like systemic risk and aids them to position their analysis and find inclusive and innovative keys for future reform.

References

Chuang, Y. W., Lin, C. Y., Shih, J. Y., & Tsai, W. C. (2017). The Value of Implementing Enterprise Risk Management: Evidence from Taiwan's Financial Industry

Liem, C. (2018). Enterprise Risk Management In Banking Industry. Firm Journal of Management Studies, 3(1), 1-15.

Lundqvist, S. A., & Vilhelmsson, A. (2018). Enterprise Risk Management and Default Risk: Evidence from the Banking Industry. Journal of Risk and Insurance, 85(1), 127-157.

https://doi.org/10.1111/jori.12151

Meinert, M. C. (2018). Embracing ERM at Community Banks. American Bankers Association. ABA Banking Journal, 110(1), 28-29.

Soliman, A., & Mukhtar, A. (2017). Enterprise Risk Management and firm performance: an integrated model for the banking sector. Banks and Bank Systems.

http://dx.doi.org/10.21511/bbs.12(2).2017.12

Zeghal, D., & El Aoun, M. (2016). The effect of the 2007/2008 financial crisis on enterprise risk management disclosure of top US banks. Journal of Modern Accounting and Auditing, 12(1), 28-51.

doi: 10.17265/1548-6583/2016.01.003

Zéghal, D., & El Aoun, M. (2016). Enterprise Risk Management in the US Banking Sector Following the Financial Crisis. Modern Economy, 7(04), 494.

http://dx.doi.org/10.4236/me.2016.74055