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Bank risk management: How do bank employees deal with risk at the strategic and operational levels?
Mid Sweden University, Faculty of Human Sciences, Department of Business, Economics and Law.
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Place, publisher, year, edition, pages
Sundsvall: Mid Sweden University , 2017. , 140 p.
Series
Mid Sweden University doctoral thesis, ISSN 1652-893X ; 263
Keyword [en]
Banks, Bank employees, Bank lending, Risk management, the Basel Accords, Global financial crisis
Keyword [sv]
Banker, Bankanställda, Basel-standarden, den globala finanskrisen, Kreditgivning, Riskhantering
National Category
Business Administration
Identifiers
URN: urn:nbn:se:miun:diva-30734ISBN: 978-91-88527-16-5 (print)OAI: oai:DiVA.org:miun-30734DiVA: diva2:1095771
Public defence
2017-06-05, M102, Holmgatan 10, Sundsvall, 13:15 (Swedish)
Opponent
Supervisors
Note

Vid tidpunkten för disputationen var följande delarbete opublicerat: delarbete 3 accepterat.

At the time of the doctoral defence the following paper was unpublished: paper 3 accepted.

Available from: 2017-05-17 Created: 2017-05-16 Last updated: 2017-06-14Bibliographically approved
List of papers
1. Risk management–control system interplay: case studies of two banks
Open this publication in new window or tab >>Risk management–control system interplay: case studies of two banks
2016 (English)In: Journal of Accounting & Organizational Change, ISSN 1832-5912, Vol. 12, no 4, 522-546 p.Article in journal (Refereed) Published
Abstract [en]

Purpose

This paper aims to explore the interplay between risk management and control systems in banks, specifically investigating the managerial intentions underlying the design of management control systems.

Design/methodology/approach

This study is based on 31 interviews with personnel of two banks in a European country.

Findings

The main finding is that belief systems drive the interplay between risk management and control systems in the studied banks. In several instances, belief systems and boundary systems were operating complementarily. Cross-case analyses of the two banks demonstrate that risk management (i.e. the Basel II Accord) replaced established operating procedures for loan origination and portfolio monitoring at the first bank, whereas senior managers suppressed Basel II to maintain established loan origination and portfolio monitoring procedures at the second one.

Originality/value

This is one of very few studies investigating the interplay between risk management and control systems in banks.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2016
Keyword
Bank, Basel II Accord, Commercial lending, Management control systems, Risk management
National Category
Business Administration
Identifiers
urn:nbn:se:miun:diva-26322 (URN)10.1108/JAOC-08-2014-0042 (DOI)000390714100004 ()2-s2.0-84994666644 (Scopus ID)
Available from: 2015-11-27 Created: 2015-11-27 Last updated: 2017-05-16Bibliographically approved
2. Basel II and the associated uncertainties for banking practices
Open this publication in new window or tab >>Basel II and the associated uncertainties for banking practices
2016 (English)In: Qualitative Research in Financial Markets, ISSN 1755-4179, E-ISSN 1755-4187, Vol. 8, no 3, 229-245 p.Article in journal (Refereed) Published
Abstract [en]

Purpose

This paper aims to explore uncertainties in the interaction between Basel II and banking practices.

Design/methodology/approach

The research setting is a centralized bank’s risk control organization and its commercial lending operations. The bank, despite its early adoption of the Basel II Accord, experienced severe credit losses during the global financial crisis. The data consist of interviews with twelve decision-makers and risk specialists at the bank and interviews with four professionals outside the bank after the global financial crisis.

Findings

This paper finds that there are three types of uncertainties in the interaction between Basel II and banking practices. The paper also describes corroborative examples of efforts to reduce such uncertainties. Among such efforts, the decision-makers excluded the risk specialists from decision-making and decentralized decision-making to branch offices.

Research limitations/implications

Although the literature generally portrays bank decision-makers and risk specialists as opposing groups, this research finds that the bank interviewees present complementary and confirmatory accounts on three types of uncertainties.

Practical implications

The findings suggest that increased regulatory pressure have operational implications for banking practices.

Originality/value

The paper has contemporary relevance with its sole focus on credit risk after the transition period provided for Basel II Accord.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2016
Keyword
Bank, Basel II, Commercial credits, Sweden, Global financial crisis
National Category
Business Administration
Identifiers
urn:nbn:se:miun:diva-27860 (URN)10.1108/QRFM-02-2016-0007 (DOI)000394170000004 ()2-s2.0-84982924126 (Scopus ID)
Available from: 2016-06-10 Created: 2016-06-10 Last updated: 2017-05-16Bibliographically approved
3. The importance of trust for inter-organizational relationships: A study of interbank market practices in a crisis
Open this publication in new window or tab >>The importance of trust for inter-organizational relationships: A study of interbank market practices in a crisis
2017 (English)In: Qualitative Research in Accounting & Management/Emerald, ISSN 1176-6093, E-ISSN 1758-7654, Vol. 14, no 3, 282-306 p.Article in journal (Refereed) Published
Abstract [en]

Purpose

This paper aims to examine interbank market practices in a crisis to understand the importance of trust in dealing with control problems and managing risk in inter-organizational relationships (IORs).

Design/methodology/approach

A qualitative field study was conducted to collect data from two case-study banks and two key banking industry institutions.

Findings

The findings illustrate the use of trust-based partner-selection criteria such as guaranteed banks (i.e., banks granted special status by key banking industry institutions) and “clan-related” banks. In addition, the findings present several trust-based performance-control processes regarding the selected counterparties, such as negative expectations, goodwill and information sharing.

Research limitations/implications

This paper highlights IORs and considers how associated control problems and risks are affected by trust in the context of a large-scale crisis.

Practical implications

The findings provide insights into interbank market practices during the global financial crisis with respect to partner selection and performance control.

Originality/value

The empirical case of the banking industry helps broaden our understanding of inter-IORs.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2017
Keyword
Bank, global financial crisis, interbank, inter-organizational relationships, trust
National Category
Business Administration
Identifiers
urn:nbn:se:miun:diva-29881 (URN)10.1108/QRAM-07-2014-0049 (DOI)
Available from: 2017-01-17 Created: 2017-01-17 Last updated: 2017-08-30Bibliographically approved
4. How Lending Officers Construe Assessments of Small and Medium-Sized Enterprise Loan Applications: A Repertory Grid Study
Open this publication in new window or tab >>How Lending Officers Construe Assessments of Small and Medium-Sized Enterprise Loan Applications: A Repertory Grid Study
2013 (English)In: Journal of constructivist psychology, ISSN 1072-0537, E-ISSN 1521-0650, Vol. 26, no 4, 262-279 p.Article in journal (Refereed) Published
Abstract [en]

Repertory grid technique and principal component analysis were used to map and analyze how 75 lending officers (LOs) viewed their assessments of small and medium-sized enterprises’ loan applications in one bank and region. A standard set of elements and constructs, derived during pre- and pilot studies, was used. Analysis of individual grids demonstrated that the principal components indicated the existence of similarities in LOs’ construing at an aggregated level. Analysis of the mean grid of all respondents indicated that the LOs were encouraged by the bank's lending strategy and supporting system(s) to perform “procedural lending” with a focus on hard and future-oriented information. At the same time, the LOs deemphasized relationship lending, in particular, personal relationships.

Place, publisher, year, edition, pages
Taylor & Francis Group, 2013
Keyword
Lending officers, SME loan assessments, Repertory grid technique Construing, Aggregated level.
National Category
Business Administration Applied Psychology
Identifiers
urn:nbn:se:miun:diva-17570 (URN)10.1080/10720537.2013.812856 (DOI)000322104800003 ()2-s2.0-84880974350 (Scopus ID)
External cooperation:
Available from: 2012-12-03 Created: 2012-12-03 Last updated: 2017-05-16Bibliographically approved
5. Female and male risk aversion: An empirical study of loan officers’ assessment of SME loan applications
Open this publication in new window or tab >>Female and male risk aversion: An empirical study of loan officers’ assessment of SME loan applications
2014 (English)In: International Journal of Gender and Entrepreneurship, ISSN 1756-6266, E-ISSN 1756-6274, Vol. 6, no 2, 121-141 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – The aim of the paper is to analyse female and male loan officers' (LOs) risk aversion as they assess different types of small- and medium-sized enterprises' (SMEs) loan applications.

Design/methodology/approach – The data were gathered from a sample of 75 Swedish LOs, using the repertory grid technique and related questions. The data were analysed statistically.

Findings – The findings demonstrate that female LOs focus more on collateral (used as a proxy for risk aversion) in their evaluations of first-time loan applications than male LOs. However, the findings also suggest that there are no significant differences between the two groups as far as risk aversion when they evaluate additional loan applications. The other variables controlled for (age, tenure, insight, education, and location) did not significantly affect the LOs' risk aversion.

Research limitations/implications – The study might have benefited from the use of complementary data collection approaches. Access to actual assessment and decision-making procedures could have increased the understanding of female and male LOs' attitudes toward risk.

Practical implications – The findings suggest that by the use of female-male LO teams, banks may achieve more balanced assessments of SMEs' loan applications.

Originality/value – To the authors' knowledge, the literature has not explicitly addressed risk aversion among female and male LOs with respect to different types of bank loans. Moreover, the authors investigated risk aversion in the context of standardised assessments procedures used to reduce exposure to credit risk.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2014
Keyword
Bank Loan, Gender, Loan officer, SME, Sweden
National Category
Business Administration
Identifiers
urn:nbn:se:miun:diva-19620 (URN)10.1108/IJGE-02-2013-0012 (DOI)2-s2.0-84902529374 (Scopus ID)
External cooperation:
Available from: 2013-07-16 Created: 2013-07-16 Last updated: 2017-05-16Bibliographically approved

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