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.
The past decades have witnessed an unprecedented increase in the number of financial distress episodes, both in developed and developing countries. Therefore, the issue of analyzing the determinants of the financial crises have become increasingly important for economies. The ability for early detection will help to minimize any costs brought about by financial instability. This book aims to carry out an extensive analysis of the micro (bank-specific) and the macro determinants of the bank fragility in the North Cyprus economy over the period 1984-2002. The macro factors considered in the analysis are macroeconomic characteristics, financial and structural weaknesses, external shocks and potential contagion effect from Turkey. Utilizing two methods, namely the logit model and the logistic survival analysis, will help in estimating the determinants of the probability of bank failure and the determinants of the timing of bank failure. An understanding of the determinants of any financial weaknesses would help bank examiners, supervisors, regulators, investors and policy makers in their decisions to alert management in time and to prevent bank failure.
In Banking, Asset and Liability Management (often abbreviated ALM) is the practice of managing risks that arise due to mismatches between the assets and liabilities (debts and assets) of the bank. Banks face several risks such as the liquidity risk, interest rate risk, credit risk and operational risk. Asset liability management (ALM) is a strategic management tool to manage interest rate risk and liquidity risk faced by banks, other financial services companies and corporations. Banks manage the risks of asset liability mismatch by matching the assets and liabilities according to the maturity pattern or the matching of the duration, by hedging and by securitization. . Modern risk management now takes place from an integrated approach to enterprise risk management that reflects the fact that interest rate risk, credit risk, market risk, and liquidity risk are all interrelated.
Financial crisis in Zimbabwe have been a common phenomenon in the financial services sector,year after year banks have collapsed despite the fact that they have risk management departments which regularly meet to review their exposure to risk and look at different measures on how to mitigate these risks.Financial institutions practice and value risk management in Zimbabwe because they understand that risk management is core to banking survival, but it was found that risk management techniques and practices are not being practiced effectively due to a variety of reasons and problems.This book provides a variety of risks financial services sector face and their implications to the economy.Financial services sector is core to the economy whenever stakeholders loose confidence in the financial services sector the economy will be affected greatly leading to economic woes as witnessed in Zimbabwe.
The current situation of the financial sector clearly shows us that the ways of predicting the future losses, along with their monitoring and management, are rather underdeveloped or being taken as separate mathematical models, thus using only quantitative analysis without the qualitative one. The role of the risk-management system cannot be underestimated, especially after (and during) the world economy crisis. The current problem of the Russian risk-management system is the low power given to the risk-management personnel. That’s why one of the key points to the better risk evaluation is the possibility of the risk-management department to report directly to the board of directors, not to the management of the bank, as it is the shareholders’ money to lose. The goal is to find the proper balance between the risk and the profit while presenting the transparency of the business. It should be done in a clear way, better an algorythm, which can be applied in many organisations by the starting employees. This book presents a sample of such an algorythm.
Banking sector is one of the vital parts of the financial system and it accumulates the idle savings of the people and makes them available for investments. If the banking sector is effective, efficient and well disciplined, it brings rapid growth in various sectors. However, there are many factors that cause the volatility of returns that could lead to unexpected losses. Business universe has not been free of risk; it has been affected by different factors in various ways. After the fall of Taliban’s regime, liberalization of the banking sector in 2002 encouraged and promoted the banking sector in the country. The Introduction of the new banking legislation in 2004 aiming to establish appropriate and effective accounting and administrative procedures, and risk management controls for the banks. Despite the new banking legislation, Kabul Bank, the private largest commercial bank, collapsed in 2010 which imposed significant fiscal costs on the country.The objective of this research is to identify the main risk drivers that increase risk in financial institutions, especially banks in Afghanistan and to find the possible ways of managing and mitigating risks in the institutions.
The book explains how interest rate risk exposure affects the financial performance of commercial banks in Uganda. The banking sector in Uganda is extremely exposed to various risk exposures in terms of volatility from exchange rates, currency fluctuations, oil prices shocks and inflation which later affects the lending activities of the banks. The purpose of the study was to highlight the key measures, strategies and best practices of minimizing risk exposures in the banking sector by practicing best risk management approaches in line with the international best practices of managing interest rate risks. The study has created avenues for discussion to the extent that the commercial banks in Uganda has achieved good sound and strong measures of the Camel rating risks measures of financial performance and risk reduction strategies in order to curb future risk exposures in the sector. We explore to encourage readers to compare our approach to bring in more insights to the banking sector best practices of interest rate risk management and best ways to sustain bank performance in the fragile environments especially financial crisis in the global financial markets and fragile economies
Islamic Banking and Finance is known to be the fastest growing economic system of the current time. It has always been in discussion that how the unique engraved risks of Islamic Finance be avoided or reduced to minimum. This book provides a comprehensive and all-encompassing view of different Risk Management Practices in Islamic Banking and Finance. This Book is equally helpful for students to build a theoretical understanding of Risk Management Techniques in Islamic Banking as well as for professionals who are practically applying these practices. This book will help them manage different risks in Islamic Banking field more appropriately.
This book highlights the essentials of Operational Risk management as applied to the Banking industry in Ghana. An empirical study that seeks to deeply inform the reader on the extent to which banks in Ghana report operational risk by way of disclosures. It is a' must-read' for all students and professionals of banking and financial services interest as a basis of intellectual comparison of what pertains in the developed and developing world contexts. The book highlights the post 2008 global banking and financial crisis regulations as contained in the Basel Accords. It presents a true value for money for every reader.
Indian banking system has well developed organization in the country. Entrepreneurs and creative thinker were established the most of the banks in India. In the pre –independence era, they provided financial support to the farmers, business community, traders and industrialists in India. At present, largest commercial bank in the country is State Bank of India. . Banking sector in India has seen lots of positive developments in the last decade. The policy makers in India have made lot of efforts to improve the regulation in the banking sector. The banking sector evaluates positive results in growth, profitability, non- performing assets, credit risk and funds management. In this scenario, some of the banks have recognized innovation and growth aspects. Banking industry in India has to strengthen them to support to the Indian economy.
Apply risk management concepts for better understanding Risk Management in Banking – Workbook is the definitive resource that makes Risk Management in Banking more accessible to both students and practitioners. Following the seminal text chapter-by-chapter, this useful workbook reinforces the material from a practical aspect, dispelling confusion and providing hands-on practice. Each chapter contains sample questions with Excel-based solutions, and a detailed set of slides that highlight the key points. Fully worked examples allow readers to follow along step by step to see how solutions are found, helping them understand the process as well as the foundational theory. Instructors will find the slides useful for classroom lectures, and practitioners will find the material to be a practical resource to illustrate real-world application. Reading through theory only takes learning so far – especially for a topic as critical as risk management, it is important to gain the deeper understanding that only hands-on practice can bring. This workbook provides plenty of practice and review opportunities, designed specifically to align directly with the text. Test information retention with sample questions for each chapter Follow worked examples to clarify complex problems Review slides that highlight key points from each chapter Understand the material from a more practical perspective Whether used as a course textbook, a comprehensive study aid, or a professional quick reference, this workbook is a valuable resource to those interested in risk management, regardless of level. For those who prefer to learn by doing, Risk Management in Banking – Workbook contains all the 'need-to-know' topics assembled in a single volume.
Banking industry serves as the backbone of the financial sector that accumulates saving from surplus economic units in the form of deposits and provides it to deficit economic units in the form of advances. So it is of great importance to keenly observe the performance of the banks and their compliance with the regulatory requirements. Performance of the banks is measured at two levels, one is at the management and regulatory level of the banks and another is at external rating agencies. It is of great importance that both these ratings present the same results about the condition of the banks to provide clear information to investors and management. CAMELS is the supervisory and regulatory rating system implemented by State Bank of Pakistan. It takes into account six important components of a bank when it evaluates performance of the bank. These components are Capital, Assets, Management, Earning, Liquidity and Sensitivity to market risk. PACRA rating agency is the dominant credit rating agency of Pakistan that performs ratings for most banks. In our research we examine the similarities in the results generated by CAMELS rating system and PACRA rating agency.