Finance

Business

Actuarial science

Risk governance

Risk management

Corporate governance

Operational risk

Credit risk

Insolvency

Financial risk management

Financial system

IT risk management

Heliyon

This study analyzes the effectiveness of bank risk management in ASEAN countries and examines the specific role of risk governance in enhancing a bank's risk management effectiveness. Our results show that the risk management effectiveness of banks in ASEAN countries is low. Furthermore, by focusing on the insolvency risk, credit risk, and operational risk management of banks in ASEAN countries, the dynamic panel models using the two-step GMM method provide evidence that risk governance structure and its effectiveness positively correlate with risk management effectiveness in banks. Based on our findings, the regulators can establish the guidelines related to risk governance to manage a bank's risk management activities and maintain bank stability.

The impact of risk governance structure on bank risk management effectiveness: evidence from ASEAN countries