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Exploring the role of risk and corruption on bank stability: evidence from Pakistan

Muhammad Ali (Department of Business Administration, Iqra University, Karachi, Pakistan)
Amna Sohail (Department of Business Administration, Iqra University, Karachi, Pakistan)
Lubna Khan (Department of Business Administration, Iqra University, Karachi, Pakistan)
Chin-Hong Puah (Department of Economics, Faculty of Economics and Business, Universiti Malaysia Sarawak, Kota Samarahan, Malaysia)

Journal of Money Laundering Control

ISSN: 1368-5201

Article publication date: 7 May 2019

901

Abstract

Purpose

This paper aims to explore the impact of liquidity risk, credit risk, funding risk and corruption on bank stability of the banking system in Pakistan.

Design/methodology/approach

The empirical analysis is confined to 24 retail banks, which include 5 Islamic and 19 conventional banks during the period of 2007-2015.

Findings

The findings of this study suggest that bank size, liquidity risk, funding risk and corruption exert a positive impact on bank stability. Additionally, the authors find a negative relationship between credit risk and bank stability.

Originality/value

As per the knowledge of the authors, the present research is the first attempt that discusses the issues of bank stability related to risk and corruption faced by the banking system.

Keywords

Citation

Ali, M., Sohail, A., Khan, L. and Puah, C.-H. (2019), "Exploring the role of risk and corruption on bank stability: evidence from Pakistan", Journal of Money Laundering Control, Vol. 22 No. 2, pp. 270-288. https://doi.org/10.1108/JMLC-03-2018-0019

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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