Measuring and Assessing Risk Culture

Nicola Bianchi () and Franco Fiordelisi
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Nicola Bianchi: University of Rome Tor Vergata

Chapter Chapter 7 in Risk Culture in Banking, 2017, pp 155-176 from Palgrave Macmillan

Abstract: Abstract Weak Risk Culture was a driver of banks’ failures after the financial crisis of 2008 (PCBS, 2013). Regulators (FSB, 2014) and practitioners (Deloitte Australia, 2012) developed frameworks to analyse and enforce RC in financial institutions; new pillar III discipline is pushing banks to develop a strong RC (BCBS, 2015). No empirical evidence exists in literature that link RC and banks’ stability. The following chapter tries to fill this gap, it uses Financial Stability Board’s framework (Financial Stability Board, 2014) of Sound Risk Culture (SRC) and extracts the vocabulary associated with a strong RC. Then, it applies quantitative text analysis (QTA) on banks’ disclosure to build a SRC Index. Finally, it analyses the correlation between the index and the Z-score of the banks.

Keywords: Culture; Bank; Disclosure; Text analysis; FSB (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-57592-6_7

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DOI: 10.1007/978-3-319-57592-6_7

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