FINANCIAL RISK MANAGEMENT- A COMPARATIVE STUDY BETWEEN IRANIAN BANKS

Mojtaba Mortezaee; Davoud Sanji

doi:10.29121/granthaalayah.v4.i12.2016.2387

Authors

MojtabaMortezaee MS.C. of Accounting, Islamic Azad University of Mashhad, Iran
DavoudSanji MS.C. of Accounting, Islamic Azad University of Mashhad, Iran

DOI:

https://doi.org/10.29121/granthaalayah.v4.i12.2016.2387

Keywords:

Financial Risk Management, Public and Private Banks, Return on Equity

Abstract [English]

Undoubtedly financial risk management due to its high impact on stockholders wealth is always considering by Banks. Risk management methods and its accomplishment leads to shareholder consent or dissatisfaction. Present research, examine this issue by three instruments of Financial risk management includes interest rate risk, capital risk and risk of natural hedging. Thus, the main problem in this content is to some extent financial risk management methods can effect on stockholders’ wealth. We separate banks into private sector and public sector and examine hypothesis for each group by regression models. Return on Equity (ROE) changes is a reliable criterion for shareholders wealth. Results show that public banks are more successful in using risk management tools in compared with private banks. In other word, we have found more meaningful relationship between financial risk management tools and shareholder wealth in public banks.

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