Investigation of Operational Risk Management Quality and Operational Risk Losses: Evidence from Ghana
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Abstract
This study documents the link between the quality of risk management practices and the operating losses of financial institutions in Ghana. Using detailed supervision data, we found that companies with lower risk management practices are higher and more volatile operating losses. We also provided evidence that the strength of risk management practices prior to the 2008-2009 financial crisis have an explanatory power. Losses during the crisis period. Our analysis provides new evidence of the importance of risk management practices to limit risk in financial institutions.