Evaluating the riskiness of the banking sector of Jordan
المؤلف | Al-Jarrah, Idries Mohammed |
تاريخ الإتاحة | 2023-11-28T07:31:13Z |
تاريخ النشر | 2012-05 |
اسم المنشور | European Journal of Economics, Finance and Administrative Sciences |
الاقتباس | Al-Jarrah, I. M. (2012). Evaluating the riskiness of the banking sector of Jordan. European Journal of Economics, Finance and Administrative Sciences, 48(48), 86-95. |
الرقم المعياري الدولي للكتاب | 86-95 |
الملخص | This study employs panel data analysis that controls for bank specific variables to evaluate the systematic, non-systematic and total risk of the banking sector of Jordan over the period 2001-2009. The total risk is measured by the annualized standard deviation of the banks' daily stock returns, the market systematic risk is measured by the beta of the banks' stock returns and the non-systematic risk is measured by the annualized standard deviation of residual errors from the market model. Various accounting variables that measure overall risk, leverage risk, credit risk and liquidity risk are employed to discern those accounting measures that are significantly correlated with the various measures of risks. Our results show that the standard deviation of return before taxes on assets, the ratio of book value of equity to total assets and the coefficient of variation of customer and short-term fund are significantly related to market measures of systematic and total risk. On the other hand, only the book value of equity to total assets ratio is found to be significantly related to non-systematic measure of risk. These results are robust for the various specifications of the model employed and specify that the systematic risk dominates the non-systematic risk in the banking sector of Jordan. Thus, neither the managers of the banks under study nor the regulatory authorities are blamed for these risks as these are noncontrollable and their impact are uniform despite any precautionary procedures that might have been undertaken. These results also propose that the various reforms undertaken by the regulatory authorities are wise and effective in reducing the impact of non-systematic risk on the banking sector under study. © EuroJournals, Inc. 2012. |
اللغة | en |
الموضوع | Accounting measures of risk Capital market measures of risk Jordan banks Non-systematic risk Systematic risk Total risk |
النوع | Article |
رقم العدد | 48 |
رقم المجلد | 48 |
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