EFFECT OF ECONOMIC FREEDOM ON RISKS OF VIETNAM'S BANKING SYSTEM
Economic freedom is an inevitable trend on a global scale, this has a certain impact on the operation of the banking system. The study was conducted to understand the effect of economic freedom on the risk of 22 Vietnamese commercial banks in the period 2010 to 2021. The study uses the fixed estimation method (FEM) and random estimation method (REM) and GLS for processing. Research results show that entrepreneurial freedom (a component of economic freedom) has a positive relationship with bank risk. Monetary freedom and financial freedom have not been shown to affect bank risk. The equity ratio and the ability to manage operating costs also have evidence to affect the risk of the banking system. Inflation also has an impact on bank risk. Then, the article proposes some governance implications for regulators.
economic freedom, risk, financial freedom, commercial banking.