Earning response coefficients and the financial risks of China commercial banks
This paper reports new findings of a significant relationship between financial risks, price risk, market risk, foreign exchange and earnings response coefficients of commercial banks: The financial risks are interest rate risk, liquidity risk, credit risk and solvency risk. The methodology used is...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
World Business Institute
2010
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| Online Access: | http://psasir.upm.edu.my/id/eprint/14172/ http://psasir.upm.edu.my/id/eprint/14172/1/Earning%20response%20coefficients%20and%20the%20financial%20risks%20of%20China%20commercial%20banks.pdf |
| _version_ | 1848842319730573312 |
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| author | Cheng, Fan Fah Md Nassir, Annuar |
| author_facet | Cheng, Fan Fah Md Nassir, Annuar |
| author_sort | Cheng, Fan Fah |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper reports new findings of a significant relationship between financial risks, price risk, market risk, foreign exchange and earnings response coefficients of commercial banks: The financial risks are interest rate risk, liquidity risk, credit risk and solvency risk. The methodology used is the well accepted earnings-to-share price relation regression with the risks as the controlling factors. Overall, the study discovers that China commercial banks have a very strong returns-to-earnings relation. Test results indicate that the liquidity risk factors of China commercial banks contributed significantly to the returns-to-earnings relation. The liquidity risk contains the information beyond earnings changes in the return-to-earnings relation. These findings suggest that lending and borrowing activities of banks will be considered as efficient if activities reduce the liquidity risk through the proper asset-liability management. The results are plausible as they show the importance of asset-liability management in commercial banks. |
| first_indexed | 2025-11-15T07:57:15Z |
| format | Article |
| id | upm-14172 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T07:57:15Z |
| publishDate | 2010 |
| publisher | World Business Institute |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-141722018-10-05T09:53:41Z http://psasir.upm.edu.my/id/eprint/14172/ Earning response coefficients and the financial risks of China commercial banks Cheng, Fan Fah Md Nassir, Annuar This paper reports new findings of a significant relationship between financial risks, price risk, market risk, foreign exchange and earnings response coefficients of commercial banks: The financial risks are interest rate risk, liquidity risk, credit risk and solvency risk. The methodology used is the well accepted earnings-to-share price relation regression with the risks as the controlling factors. Overall, the study discovers that China commercial banks have a very strong returns-to-earnings relation. Test results indicate that the liquidity risk factors of China commercial banks contributed significantly to the returns-to-earnings relation. The liquidity risk contains the information beyond earnings changes in the return-to-earnings relation. These findings suggest that lending and borrowing activities of banks will be considered as efficient if activities reduce the liquidity risk through the proper asset-liability management. The results are plausible as they show the importance of asset-liability management in commercial banks. World Business Institute 2010 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/14172/1/Earning%20response%20coefficients%20and%20the%20financial%20risks%20of%20China%20commercial%20banks.pdf Cheng, Fan Fah and Md Nassir, Annuar (2010) Earning response coefficients and the financial risks of China commercial banks. International Review of Business Research Papers, 6 (3). pp. 178-188. ISSN 1832-9543 http://www.bizresearchpapers.com/View%20Articles_current90.htm |
| spellingShingle | Cheng, Fan Fah Md Nassir, Annuar Earning response coefficients and the financial risks of China commercial banks |
| title | Earning response coefficients and the financial risks of China commercial banks |
| title_full | Earning response coefficients and the financial risks of China commercial banks |
| title_fullStr | Earning response coefficients and the financial risks of China commercial banks |
| title_full_unstemmed | Earning response coefficients and the financial risks of China commercial banks |
| title_short | Earning response coefficients and the financial risks of China commercial banks |
| title_sort | earning response coefficients and the financial risks of china commercial banks |
| url | http://psasir.upm.edu.my/id/eprint/14172/ http://psasir.upm.edu.my/id/eprint/14172/ http://psasir.upm.edu.my/id/eprint/14172/1/Earning%20response%20coefficients%20and%20the%20financial%20risks%20of%20China%20commercial%20banks.pdf |