QUALITY BASED CREDIT RISK MITIGATION FOR BANK PERFORMANCE ENHANCEMENT: EMPIRIC STUDY IN AN INDONESIAN BANK
AbstractThere is an ongoing controversy over whether risk mitigation inherently enhances business performance. The aim of this paper is to settle the controversy, and provide insights roles of risk mitigation on corporate strategy. Author examined implication of Lean Six Sigma at credit risk mitigation system at one of Indonesia banks. Based on responses from 112 credit analysts and database of business units performance indicators, this research showed a relationship between the implication of Lean Six Sigma at credit risk mitigation system and unit bank's performance. Quality Based Credit Risk Mitigation which is credit risk mitigation using Lean Six Sigma system will enhance business units’ performance through improvement in credit quality and credit process efficiency.
Aboelmaged, M.G. (2009). Six Sigma quality: a structured review and implications for future research. International Journal of Quality & Reliability Management, 27 No.3, 2010 268-317© Emerald Group Publishing Limited 0265-671X.
Acharya, V., I. Hasan, A. Saunders. (2006). Should banks be diversified? Evidence from individual bank loan portfolios. Journal of Business 32, 1355–1412
Alexander, C. (2005). The present and future of financial risk management. Journal of Financial Econometrics, Vol. 3 No. 1, 3-25.
Allayannis, G., and J. Watson. (2001). The Use of Foreign Currency Derivatives and Firm market Value. review of Financial Studies, Vol.14, No. 1 (Spring 2001) pp 243-276
Antony, J. (2004). Some pros and cons of Six Sigma: an academic perspective. The TQM Magazine. Vol. 16 No. 4, 303-6.
Arnheiter, E. D., and J. Maleyeff. (2005). The Integration of Lean Management and Six Sigma. The TQM Magazine, Vol.117, No.1, 5-18, Emerald Group Publishing Limited
Ballou, B., and Knechel, W. R. (2002). Ceskoslovenská Obchodní Banka, as: applying business risk audit techniques in an emerging market economy. Issues in Accounting Education, 17 (3), 289-313.
Bank Indonesia. (2012). Perbankan RI Kalah di ASEAN Bank-bank Nasional Harus Lebih Tingkatkan Efisiensi. Kompas, 26 Juni 2012
Baron, R. M., and Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality & Social Psychology, 51 (6), 1173-1182.
Basel, Committee on Banking Supervision. (2000). The standardized approach to credit risk. Bank for International Settlements
Barnard, C. (1938). Functions of Executive. Copy Right on 1938, By President and Coleagues, Harvard, US.
Basel, Committee on Banking Supervision. (2004). Basel II: International convergence of capital measurements and capital standards: A revised framework. Bank for International Settlements, 239
Bendell, T. (2006). A review and comparison of Six Sigma and the Lean Organization. The TQM Magazine, Vol. 18, No.3
Berger, A.N. and G.F. Udell. (1995). Relationship Lending and Lines of Credit in Small Firm Finance. Journal of Business, 68 (3), 351-381.
Berger, A. N. and R. DeYoung. (1997). Problem Loans and Cost Efficiency in Commercial Banks. Journal of Banking and Finance 21, 849-870.
Berger, A.N., and D. B. Humphrey. (1991). The Dominance of Inefficiencies over Scale and Product Mix Economies in Banking. Journal of Monetary Economics 28, 117- 148.
Berger, A.N. and L.J. Mester. (1997). Inside the Black Box: What Explains Differences in the Efficiencies of Financial Institutions?. Journal of Banking and Finance 21, 895-947.
Berger, A.N. and D.B.Humphrey. (1997). Efficiency of Financial Institutions: International Survey and Directions for Future Research. European Journal of Operational Research 98, 175-212.
Bonfirm, D. (2009). Credit risk drivers: Evaluating the contribution of firm level information and of macroeconomic dynamics. Journal of Banking & Finance 33 (2009) 281–299
Bos., J.W.B., and James W.Kolari. (2005). Large Bank Efficiency in Europe and the United States: Are There Economic Motivations for Geographic Expansion in Financial Services?. The Journal of Business, Vol.78, No.4 (Juli, 2005), 1555-1592
Byrne, G., D.Lubowe, and A. Blitz (2007). Using a Lean Six Sigma approach to drive innovation. Strategy & Leadership, Vol.35 No.2.
Breuer, J. B. (2005). Problem bank loans, conflicts of interest, and institutions. Journal of Financial Stability, 2 (2006) 266–285
Cetorelli, N. and P.F. Peretto. (2012). Credit quantity and credit quality: Bank competition and capital accumulation. Journal of Economic Theory, 147 (2012) 967–998
Charette, R.N. (1990). Applications Strategies for Risk Analysis. McGraw-Hill, Inc. New York, NY, USA , ©1990 ISBN:0070109125
Chen, Y. (2006). Collateral, loan guarantees, and the lenders’incentives to resolve financial distress, The Quarterly Review of Economics and Finance, 46 (2006) 1–15
Chen, Y., S. Zhu, and Y. Wang .(2011). Corporate fraud and bank loans: Evidence from china. China Journal of Accounting Research 4 (2011) 155–165
Clough, R.H. and G.A. Sears. (1994). Construction Contracting. 6th, John Wiley & Sons Inc., New York.
Crockett, A. (1997). The Theory and Practice of Financial Stability. Essays in International Finance, 203, Princenton: International Finance Section, Princenton University
Darmawi, H. (2005). Manajemen Risiko. 9th ed, Bumi Aksara,Jakarta
De Lis, S.F., J.M. Pagés and J. Saurina. (2001). Credit growth, problem loans and credit risk provisioning in Spain. BIS Papers No. 1, Marrying the Macro and Microprudential dimensions of financial stability, Monetary and Economic Department, March 2001
Demidenko, E., and P. McNutt. (2010). The ethics of enterprise risk management as a key component of corporate governance. International Journal of Social Economics Vol. 37 No. 10, 2010, 802-815, Emerald Group Publishing Limited 0306-8293
Díaz, A. and F. Perera-Tallo. (2011). Credit and inflation under borrower’s lack of commitment, Journal of Economic Theory 146 (2011) 1888–1914
De Koning, H., R. Does and S. Bisgaard. (2008). Lean Six Sigma in financial sevices, International Journal of Six Sigma and Competitive Advantage, Vol.4 No.1, pp 1-17
De Mast, J. (2006). Six Sigma and Competitive Advantage. Institute for Business and Industrial Statistic of the University of Amsterdam, Amsterdam,The Netherlands, Total Quality Management, Vol.17, No.4,455-464, May 2006
Duthoit, C., D. Goyal, H. Ketterer, T. Reichert, S. Ramachandran, and B.Rehberg. (2008). Banking on Lean Advantage. Boston Consulting Group, New York
Etzioni, E. (2007). Modern Organization. Phi Learning, ISBN: 8120301935
Evans, L., Y. Altunbas, and P. Molyneux. (2001). Bank Ownership and Efficiency. Journal of Money, Credit, and Banking 33, 926-954.
Fan, L., and S. Shaffer. (2004). Efficiency Versus Risk in Large Domestic US Banks. Managerial Finance, Volume 30 Number 9 2004
Fairchild, R. (2002). Financial risk management: is it a value-adding activity?. Balance Sheet 10.4.2002, 22-25 @ MCB UP Limited 0965-7967
Fight, A. (2004). Credit Risk Management. Butterworth-Heinemann, 22 Nov 2004
Fioderlisi, F., Marquey-Ibanez, D. and Molyneux, P. (2010). Efficiency and risk in European banking. Working Paper Series no.1211
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (Creative Commons Attribution License 3.0 - CC BY 3.0) that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
firstname.lastname@example.org, www.cbuni.cz, ojs.journals.cz