In view of growing complexity of banks’ business and the dynamic operating environment, risk management has become very significant, especially in the financial sector. Risk at the apex level may be visualized as the probability of a banks’ financial health being impaired due to one or more contingent factors. While the parameters indicating the banks’ health may vary from net interest margin to market value of equity, the factor which can cause the important are also numerous. For management of risk at corporate level, various risks like credit risk, market risk or operational risk have to be converted into one composite measure. Therefore, it is necessary that measurement of operational risk should be in tandem with other measurements of credit and market risk so that the requisite composite estimate can be worked out. So, regarding to international banking rule (Basel Committee Accords) and RBI guidelines the investigation of risk analysis and risk management in Co-Op banks is being most important.
The recent turmoil on financial markets has made evident the importance of efficient liquidity risk management for the stability of banks. The measurement and management of liquidity risk must take into account economic factors such as the impact area, the timeframe of the analysis, the origin and the economic scenario in which the risk becomes manifest. Basel III, among other things, has introduced harmonized international minimum requirements and has developed global liquidity standards and supervisory monitoring procedures. The short book analyses the economic impact of the new regulation on profitability, on assets composition and business mix, on liabilities structure and replacement effects on banking and financial products.a??
This Book focuses on the Credit and Risk Analysis carried out by the Banks during appraisal of a loan proposals for Large Corporates i.e., with a turnover of above 500 crores. The Book focusses about the fundamental aspects involved in the Credit Appraisal and associated Risk Management. The Book deals from the perspective of a Bank and the Regulatory Norms as stipulated by the Regulator of Banking System in India i.e., Reserve Bank of India. The report is a descriptive study with basic objective of understanding procedural aspects involved in the Credit Appraisal and Risk Management before and after sanctioning of Bank Credit to the Large Corporate enterprises. During Credit Appraisal, Bank needs to do a 360° assessment of the proposal submitted by the Corporate by verifying its managerial integrity and commercial, technical, financial viability. It has been observed that the Credit risk management enables bank to identify, assess, manage proactively, and optimize their credit risk.
The turmoil caused by problems in the American mortgage market has served as an important reminder of the interdependency of global financial institutions. This book presents a survey of the fundamental issues surrounding risk management and shows how central banks and other public investors can create better risk management systems.
This book presents the results of the study on influence of Environmental Risk Management on the general performance of commercial banks in Uganda. Quantitative research approaches were adopted and a method of data collection, consisting of a survey questionnaire was used. The results from the research provide some evidence that commercial banks in Uganda incorporate environmental issues into lending decisions and are aware of environmental risks and opportunities. It further revealed that good Environmental Risk Management(ERM)contributes to better overall performance of banks and that consideration of environmental issues when making lending decisions is important to banks. The study recommended development and implementation of a comprehensive environmental risk management system and frameworks, adoption environmental management procedures, adoption of appropriate strategy and consideration of structured community participation in monitoring funded projects for enhancing ERM.
The present study has focused on following aspects. First, an attempt has been made to examine the importance given to various types of risks being faced by Indian banks. Second, to study the risk management framework among banks, the study examines the size and ownership effect on the Risk Management Practices in banks. Third, we enumerate the growth and performance of banking sector in India since implementation of Basel I. Last issue undertaken in this study is to put forth the major challenges that are being faced by banks in India with the implementation of Basel II Accord and to suggest the procedures to face these challenges.
Capital adequacy requirements are the rules that help bank supervisors determine whether banks hold sufficient capital at all times to meet unexpected losses. The banking industry had moved ahead with its risk assessment technique, economic capital models and risk based pricing. The turmoil in banking industry has provided an opportunity to examine the robustness of risk assessment techniques and economic capital models.This book provides a good understanding of the reasons behind bank failures, risk assessment techniques, economic capital models and risk based pricing that reduce the risk of future failures. The importance of risk management of commercial banks in terms of capital measurement has been emphasized throughout.The prime objective of the book is the measurement of capital of the unexpected loss for risk management of the commercial banks in order to prevent insolvency. It provides technique to quantify capital for holding on economic basis.
Risk Management, the process of measuring the risks, controlling them and implementing measures in order to achieve the desired risk profile, is fundamental to all aspects of a bank’s activities. Due to the liberalization of financial markets, advances in technology and the various risks brought by these developments, the way that banks practice Risk Management has substantially changed during the last years. The important role that an effective Risk Management plays in ensuring banks’ profitability and continuity is widely proven. This survey was conducted to provide a status position on the extent to which Risk Management is practiced by banks in North Cyprus. The survey revealed that risk management systems in TRNC banks are relatively underdeveloped and there is a low level of awareness in banks on the importance of employing an integrated Risk Management framework. There are various gaps that demonstrate the need for developing Risk Management in TRNC banking sector and employing innovative Risk Management tools to manage the risks, non-credit risks in particular.
Present study deals with operational risks of banks (i.e. as Basel II defines “the risk of loss resulting from inadequate or failed operation of people, systems, and processes or from external events”). The complexity of financial institutions and the regulatory efforts make the analysis of the operational risk necessary. The main message of this book is that institution size has an important effect on operational risk exposure and management. Firstly, a well-behaving stylised stochastic process based approach underpins the applicability of Poisson frequency and fat-tailed loss distributions, however a method built from historical data on a small sample may result in estimation bias. Secondly similarly to the results for other countries the total operational risk losses in a given period are significantly correlated with gross income-based size of banks in Hungary as well, mainly driven by frequency. Finally, it is found that larger institutions are more inclined to use advanced operational risk management methods. This might be a favourable tendency from systemic risk point of view, as institutions with potentially higher system risk tend to apply more conscious risk management.
'Analysis on credit concentration risk and NPA in Bank's Portfolio' analyzes the credit portfolio composition of a large and medium sized commercial bank in India to understand the nature and dimensions of industry –wise credit concentration risk and also evaluates its influence on Non-Performing Assets of the banks. The required data for this study was collected from industry-wise loan exposures of Indian Overseas Bank and yearly NPAs of the bank. The industry-wise credit concentration risk for each year is calculated by using Herfindahl-Hirschman Index (HHI index). Multiple Linear Regression Analysis was run on SPSS 19.0 to quantify the relationship between the credit concentration risk and Non-Performing Assets of the commercial bank. The results indicate that there exists a strong positive relationship between the industry-wise concentration risk and NPA of the commercial bank. Hence it is highly desirable for the commercial banks to have a diversified portfolio in order to reduce their Non –Performing Assets.
This monograph focuses on the liquidity risk of commercial banks in the Visegrad countries in the period from 2000 to 2011. This risk is comprehensively evaluated with several different methods: six liquidity ratios, panel data regression analysis with fixed effects, probit model and scenario analysis. The liquidity position, net position on the interbank market and strategy of liquidity risk management differ significantly in individual Visegrad countries. The capital adequacy is the most important determinant of bank liquidity. However, some other factors such as size of the bank, credit portfolio quality or macroeconomic development are significant as well. All three tested stress scenarios would have a negative influence on bank liquidity. A run on the bank would have most serious impact on the bank liquidity in all Visegrad countries. The use of committed loans is the second most severe scenario for Czech and Slovak banks and a crisis confidence in the interbank market for Hungarian and Polish banks.
Risk Management in the various areas of Healthcare is an increasingly interesting topic, both from a technical-professional aspect and an organizational one. It is the subject of careful considerations that have a strong and constant social impact. The knowledge, awareness and study of the risk issue are essential elements of healthcare assistance and should be considered in the general context of Quality. In particular, a system of Risk Management is an integral part of an effective quality enterprise system, whatever the principles it is inspired to. An essential objective for healthcare organizations is to meet the needs of population providing proper performance of quality with affordable prices and, above all, safe services. Nowadays, the healthcare services are characterized by a high level of risk, made evident by a continuous interaction of multiple peculiar heterogeneous and dynamic factors that make an healthcare organization a complex system. In this work we will firstly introduce Risk Management in Healthcare, its birth, development and evolution over time. Afterwards, we will focus in the particular field of Risk Management in Dental Implantology.
In research performed I watched to present methods of classification of loans and methods of establishing internal ratings within the banks. The result of the method of classifying assets consists in identifying good quality loans and their separation by the nonperforming loans. I also conducted an analysis of the situation of currency risk in case of the commercial banks. Thus I determined a set of indicators that can be measured both at the level of territorial units as well as the level of Central Bank. Another important issue addressed in the paper is the importance of ensuring solvency of the bank in overtaking difficulties generated by the financial crisis. In the chapter relating to the measurement the risk of interest rate I identified a technique used in banking to reduce interest rate risk, named GAP model or model of discrepancy between assets and liabilities of banks. In terms of reduction of the liquidity risk I presented a method that allows monitoring the indicators of liquidity on maturity bands. In the chapter concerning to management of the operational risk I presented a new method for managing this type of risk, respectively the insurance of operational risk.
Risk Management is one of the challenging tasks in financial industries. In banking system risk occurs due to internal and external factors, like government intervention with fiscal policies. To measure the efficiency of banks we need to identify the risk factors in banks. Impact of this risk factors is disentangle from overall efficiency. Stochastic Frontier Analysis (SFA) and (Data Envelopment Analysis)are two major techniques used to measure the efficiency of organizational units where multiple inputs and outputs makes comparison difficult. This thesis explains about the DEA analysis, how to assess and disentangle the risk factors effect from overall efficiency in different stages. DEAP,EMS and QSB are some of the computer oriented programmes useful in calculating efficiency. SAS is also one of the major high level programming language useful to solve linear and non-linear programming techniques. The ultimate objective is to identify which banks were seriously affecting with this risk factors.