Bank and Macroeconomic Variables Efficiency in Risk Management

This study investigates the factors affecting risk management efficiency of banking industry during 2001-2009, taking 15 public and private operating banks in Iran. For this purpose, capital adequacy ratio is considered as risk management efficiency indicator and other determinants are divided into bank specific indicators and macroeconomic variables. Empirical results represent a positive relationship between the liquidity, profitability, operating efficiency, economic growth and capital adequacy ratio while credit risk and inflation rates have a negative effect on capital adequacy ratio as an indicator of risk management efficiency in banks.