EXAMINING THE IMPACT OF BANKING COMPETITIVENESS ON RISK IN VIETNAMESE COMERCIAL BANKS

Abstract

This paper analyzes the effect of banking competitiveness on credit risk, default risk, and operational risk in Vietnamese commercial banks. Using a sample of 30 commercial banks operating in Vietnam between 2009 and 2021, the authors employ the GMM regression method to control for potential endogeneity and measure banking competitiveness using the Lerner index. Results show that improving banking competitiveness can limit credit risk, but it can also increase default risk and operational risk. The findings have important implications for managing risks in commercial banks during periods of economic volatility.