Study of the governance framework for credit risk management in Maltese banks

Abstract

The purpose of this study was to investigate the relationship between corporate governance and credit risk management in banks. Banks play a very important role in the economy since they act as financial intermediaries between savers and borrowers and therefore encouraging economic growth. Banks can lose a lot of money if an individual or a group of individuals make a bad judgement about a particular transaction. Hence, the bank’s financial stability is very important since serious problems, including flaws in the governance framework could threaten the economy as a whole. The researcher distributed a number of questionnaires to commercial banks to gain insight on the main elements that make up the credit risk management framework. The reason for questioning such banks was to be able to compare the credit risk management framework implemented by each of the different sized bank Finally, the researcher comes up with recommendations for further research in the topic that can enhance author’s findings.