Corporate Governance in Banks and its Impact on Credit and Liquidity Risks: Case of Tunisian Banks
Abstract
Given the crucial role played by banks in a developing country like Tunisia, it is important to maintain their stability. The purpose of this article is twofold. First, it studies the effect of banking governance on credit risk. Second, it tests the relationship between bank governance mechanisms and liquidity risk. In this article, we have combined literature regarding two areas of governance, first, ownership structure and board characteristics, and second, their impact on banking risks. To achieve this goal, we used a sample of 10 Tunisian banks observed during the period 1998-2015. The econometric approach used in this study is based on both the fixed and random effects models of panel data analysis. Our results show that credit risk and liquidity risk are directly related to bank governance mechanisms. These findings enable bank managers to better understand the factors influencing bank risk and serve as a basis for regulations to strengthen bank governance.
Submission of an article implies that the work described has not been published previously (except in the form of an abstract or as part of a published lecture or academic thesis), that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, will not be published elsewhere in the same form, in English or in any other language, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication.
Copyrights for articles published in MTI journals are retained by the authors, with first publication rights granted to the journal. The journal/publisher is not responsible for subsequent uses of the work. It is the author's responsibility to bring an infringement action if so desired by the author.
