Impact of operational risk management on the performance of Moroccan credit institutions

Abstract

While searching for sustainable value creation, banking entities have to conceive and implement performance-driven strategies. Therefore, banks have to make a double effort in seeking performance and risk managing. This work is done upstream of the managerial process, on an ongoing basis and downstream of this process. Upstream, risk management is a major determinant of operational strategies. On an ongoing basis, risk management is a permanent work that aims to indentify and correct gaps. Finally, and downstream, risk management is regarded as a performance in itself as to respecting the prudential norms and regulation. Therefore, there’s a tight dependence between performance and risk management.

In order to analyse this relationship, we applied the econometrical model of panel ARDL. At the end of this work, it has been demonstrated that there is a dependency relationship between these two variables. This latter is mainely about operational risk and performance, hence the importance for banking entities to combine between the prudential approach and the operational one while designing their strategies.

JEL Classification : G21, G28, G32

Paper Type : Empirical Research