THE RELATIONSHIP BETWEEN THE RISK MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF THE LISTED BANKS IN CHINA

Abstract

As the core of the modern financial system, banks have a pivotal position in the social economy. In order to achieve their own stable development and maximize profits, banks should continuously improve their risk management systems. Based on this, this paper selects the data of 30 listed banks in China from 2014 to 2017 to conduct empirical research on the relationship between bank performance and liquidity risk, credit risk and market risk. The study reviewed several literatures in line with the area of study. This review enabled the researcher to demonstrate and familiarize with the area of study. The review also helped identify gaps in previous studies. This study sought to review the effect of credit risk management on the financial performance of commercial banks. The research design used in this study was descriptive research design. The study found out that there is a strong impact between the risk’s management on the financial performance of listed banks with penal data model. From this perspective, make some suggestions on the risk management of listed banks.