Effective Risk Management Boosts Financial Performance of Jordanian Banks
The study looked at how risk management affects the financial performance of banks in Jordan. By analyzing data from over 100 participants, the researchers found that better risk control leads to improved financial performance. Specifically, managing credit, liquidity, and market risks can positively impact a bank's overall financial health. For every increase in risk control, financial performance improves by 1%, while credit risk, market risk, and liquidity risk can affect financial performance by 1.6%, 1.5%, and 4.7% respectively. This shows that effective risk management is crucial for banks to succeed in challenging economic environments.