The effect of managerial ability on the relationship between credit risk and liquidity risk with the probability of bank default
Subject Areas :Shokoufeh Etebar 1 , Shohre Ebrahimi 2
1 - Assistant Professor of Accounting, College of Skills and Entrepreneurship, Karaj Branch, Islamic Azad University, Karaj, Iran
2 - Department of Accounting, Faculty of Management and Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran
Keywords: Bank default, credit risk, liquidity risk, management ability,
Abstract :
Purpose: The aim of this study is to investigate the effect of managerial ability on the relationship between credit risk and liquidity risk on the probability of bank default.
Methodology: The required data were collected from 10 banks listed on the Tehran Stock Exchange during 12 years from 2011 to 2022, and the data were analyzed using econometric techniques and multivariate regression.
Findings: The findings of the study showed that both credit risk and liquidity risk have a positive and significant effect on the probability of bank default. It was also found that managerial ability reduces the positive effect of liquidity risk on the probability of bank default, but it has no effect on the relationship between credit risk and the probability of bank default.
Originality: Banks are very important in the economic growth and development of countries, hence the evaluation and understanding of the factors affecting the probability of bank default has become a topic of interest in academic research. The result of the research can be effective for preventing the possibility of bank default.
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