Description:
This paper investigates the impacts of corruption, economic freedom, interest rate, capital regulation and transparency on bank risk-taking in both theoretical and empirical analysis. The data were collected from 6 chosen ASEAN countries from 2011–2020. The generalized method of moments (GMM) and Generalized Linear Models (GLMs) model were used to analyse the data and validate the models. The results show that in highly corrupt countries, banks take high risks, increased economic freedom induces banks to take low risks, fallen interest rates persuade banks to undertake lower risks and to increase their stability, and well-capitalized banks undertake higher risks than those under-capitalized. Overall, our findings reveal that information on corruption, economic freedom, interest rate, capital regulation and transparency is significant for the government, regulatory authorities and other stakeholders to determine the genuine risk of the six chosen ASEAN countries’ banks