Risk Management and Its Impact on Banking Sector Performance: Evidence from Pakistan

Abstract

over the last decade, profit in Pakistani banking sector is highly vulnerable which indicates that banking sector faced some obnoxious events commonly known as Risk that left sunwanted and intolerable effects. Therefore this paper highlights those determinants that are not only attributable for the reduction in banks’ profitability but also mark a question on banks’ performance. The dynamic panel data models’ analyses used for investigating the extent through which Banks’ Risk produced effects on Banks’ performance. The unbiased and consistent estimates obtained from two step system GMM reveals that all the under studied risk types are attributable for the reduction in the Banking Sector Performance in Pakistan.