Determinants of Bank Business Risk According to Risk Based Approach Kurnia Haryakusuma (a*)
Management Department, Faculty of Economics and Business
Airlangga University
Jalan Airlangga 4-6 Surabaya 60286
(email: haryakusuma.kurnia[at]gmail.com)
Abstract
Banks have important role on economy of Indonesia, with a fully regulated principle, Banking Sectors in Indonesia concern to keep in a good performance according to Indonesia Bank Rules No. 13/1/PBI/2011, which emphasize on risk-based approach. Therefore, this paper purposes to examine the factors that affect commercial banks business risk that listed on Indonesia Stock Exchange. Those factors consist of risk profile (credit risk, liquidity risk, and interest rate risk), good corporate governance, earnings, and capital. The sample used in this research are 26 commercial banks that listed on Indonesia Stock Exchange during research period since 2011 to 2013. This research uses multiple linear regression analysis. The result of the findings are credit risk has effect against business risk. While, liquidity risk does not have effect against business risk. Interest rate risk has effect against business risk. Good corporate governance does not have effect against business risk. Earnings has significant effect against business risk. Capital does not have effect against business risk. Hence, the implication of the research is commercial banks business risk is affected by three factors from risk-based bank rating (credit risk, interest rate risk, and earnings).
Keywords: RGEC, Bank Business Risk, Bank Performance, Risk Based Approach
