Basel III framework on banking supervision highlights the crucial role of a sound organization in risk management processes. Using a structured survey sent to a group of Italian banks, the study verifies the alignment of organizational choices to sound practices suggested by supervisors. We investigate the role played by the Chief Risk Officer, and the level of integration with the Board of Directors. Our results demonstrate the increasing centrality and strategic responsibilities of the Chief Risk Officer, although with the high level of heterogeneity among banks. Moreover, the increase in integration between governance bodies and the Chief Risk Officer has a positive effect on both bank risk appetite and bank portfolio quality. The main findings suggest that the effectiveness of credit risk management is affected by the spectrum of the responsibilities assigned to the Chief Risk Officer and by the level of integration of risk structures with top governance bodies.

Do the organizational choiches really affect credit risk? Some evidence from Italian banks / Federica Ielasi. - In: INTERNATIONAL JOURNAL OF BUSINESS AND SOCIAL SCIENCE. - ISSN 2219-1933. - STAMPA. - 10:(2019), pp. 156-169. [10.30845/ijbss.v10n2p1]

Do the organizational choiches really affect credit risk? Some evidence from Italian banks

Federica Ielasi
2019

Abstract

Basel III framework on banking supervision highlights the crucial role of a sound organization in risk management processes. Using a structured survey sent to a group of Italian banks, the study verifies the alignment of organizational choices to sound practices suggested by supervisors. We investigate the role played by the Chief Risk Officer, and the level of integration with the Board of Directors. Our results demonstrate the increasing centrality and strategic responsibilities of the Chief Risk Officer, although with the high level of heterogeneity among banks. Moreover, the increase in integration between governance bodies and the Chief Risk Officer has a positive effect on both bank risk appetite and bank portfolio quality. The main findings suggest that the effectiveness of credit risk management is affected by the spectrum of the responsibilities assigned to the Chief Risk Officer and by the level of integration of risk structures with top governance bodies.
2019
10
156
169
Goal 9: Industry, Innovation, and Infrastructure
Goal 12: Responsible consumption and production
Federica Ielasi
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Utilizza questo identificatore per citare o creare un link a questa risorsa: https://hdl.handle.net/2158/1165373
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