Journal Press India^®

Author Details ( * ) denotes Corresponding author

This paper constructs a theoretical model of institutional factors on the chance of economic banks, and discusses the impact of the institutional setting on the bank risk. It constructs a non-balanced panel regression model by choosing the variables that mirror the irregular risk and general risk of the bank, and carries on the empirical analysis. The analysis indicates that the amount of corruption management and political stability improves the level of the allocation of risk assets and the development of the institutional setting features a positive impact on the soundness of the banking industry.

Keywords

Institutional factors; Commercial banks; Unsystematic risk; Systemic risk

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