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Title:Risk management and managerial efficiency in Chinese banks: A network DEA framework PDF Logo
Authors:Matthews, Kent
Issue Date:2010
Series/Report no.:Cardiff Economics Working Papers E2010/1
Abstract:Risk Management in Chinese banks has traditionally been the Cinderella of ist internal functions. Political stricture and developmental imperative have often overridden standard practice of risk management resulting in large non-performing loan (NPL) ratios. One of the stated aims of opening up the Chinese banks to foreign strategic investment is the development of risk management functions. In recent years NPL ratios have declined through a mixture of recovery, asset management operation and expanded balance sheets. However, the training and practice of risk managers remain second class compared with foreign banks operating in China. This paper evaluates bank performance using a Network DEA approach where an index of risk management practice and an index of risk management organisation are used as intermediate inputs in the production process. The two indices are constructed from a survey of risk managers in domestic banks and foreign banks operating in China. The use of network DEA can aid the manager in identifying the stages of production that need attention.
Subjects:risk management
risk organisation
managerial efficiency
Network DEA
JEL:D23
G21
G28
Document Type:Working Paper
Appears in Collections:Cardiff Economics Working Papers

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