Abstract

          The study problem focused on the underlining and application of the models and the extent to which the banks adopted the field of study for them. The importance of the study emerged from an attempt to collect two models. The first concern is to study the risk adjusted returns and the second by predicting the financial failure of the banks.

      The aim of this study is to test the impact of one of the risk management models (RAROC) and one of the models of financial failure forecasting, namely, the Sherrord model, and their reflection on the financial market indicators through a sample sample of banks (7) banks, for the period between (2008 – 2014).

      The study used two indicators of the RAROC model: net income and economic capital, while six indicators of the Sherrord model were used: net working capital to total assets, liquid assets to total assets, total equity To total assets, net profit before tax to total assets, total assets to total liabilities, total shareholders’ equity to total fixed assets, as well as the use of three stock market indices from global exchanges: the London Financial Times, the Dow Jones and the Standard & He traded for the New York Stock Exchange.

      As the results of the test hypotheses of the study of the banks investigated, with the weak statistical significance between their variables.

      The study concluded with a number of conclusions. The most important of these conclusions is that financial market indicators can not be strengthened by applying the RAROC and Sherrord models unless the actual data of the surveyed banks are disclosed and transparent. And a set of recommendations, most notably, the need to take the necessary measures and measures to hedge risks and carry out periodic checks to detect the current phase of failure.

    The study was based on the coefficient of correlation and influence as a statistical method to find the type of statistical relationship between the variables adopted.