Determination of bank risk indicators and macroeconomic conditions in Venezuela (1997-2009)

Venezuelan commercial and universal banks, as many banks in the rest of the world, are exposed to financial risks (credit risk, liquidity risk) and to operational risks. In this paper, the main relationships between the risks factors faced by banks and relevant economic variables are analysed, using structural equations models (Jöreskog’s LISREL models). This sort of statistical modelling allows the evaluation of the three types of risks, finding new indicators for the assessment of those risks. The influence of the macroeconomic environment on the three types of risks analysed is also confirmed.