Role of credit risk, market risk, liquidity risk, and operational risk on banking financial performance with good corporate governance as a moderating variable

Abstract

The purpose of this study was to determine the effect of credit risk, market risk, liquidity risk, and operational risk on banking financial performance. Good corporate governance moderates the relationship between these variables and banking financial performance. The population in this study consisted of banking companies listed on the Indonesia Stock Exchange from 2020 to 2024. The technique for sampling was purposive sampling, and based on the criteria that have been used, the number of samples obtained was 20 banking companies. Research hypothesis testing utilized Multiple Linear Regression Analysis and the Moderated Regression Analysis Technique. The results of this study indicated that the variables of credit risk, market risk, liquidity risk, and operational risk have a positive effect on banking financial performance. In addition, this research also showed that good corporate governance variables could strengthen the influence of credit risk, market risk, liquidity risk, and operational risk on banking financial performance. However, the MRA test results showed a significance of 0.765, which is greater than 0.005, so it can be concluded that good corporate governance did not have a significant influence on the variables of credit risk, market risk, liquidity risk, and operational risk on banking financial performance.