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Received: 2019-12-16 | Accepted: 2020-04-11 | Published: 2020-06-30

Title

Bank risk management in the conditions of financial system instability

Abstract

Purpose of research is to influence prompt decision-making on the financial market in case of risk management of the bank. The banking sector is usually undergoing a serious reform phase. Investigating the bank's risk management basics using modern approaches to risk assessment and management in banking. The bank's risk leads to the loss of credit institutions and deterioration of liquidity, due to adverse events occurring, depending on internal and external factors. The article discusses the organization of the bank risk management system, methods of risk management, quantitative and qualitative risk assessment. Banks use various methods to reduce their risk. The main types of risks, risk management system, ways of managing bank risks and ways to reduce them were considered. Quality of the bank's management, especially the risk management process, are the key factors that ensure stability and security of banks and the banking system as a whole. Common methods of scientific research have been developed. It is necessary to pay special attention to the risks of banks on the financial market. The deterioration of the situation in the financial market was associated with problems accumulated over many years, and some problems were solved, which in turn led to risks. The structure of the bank's risk management mechanism is presented, the characteristics of its elements are identified and the key objectives of the management mechanism are identified. In the study, all banks in the financial market were analyzed using the models in Gretl, with the major risk factors being analyzed. The mechanism of risk protection of banks consists of current methods of risk management and methods of its reduction. The roles, responsibilities and powers of regulatory bodies in the creation of an effective system of legal norms regulating the peculiarities of the risks taken by the bank are risk management as an element of the internal control system of banks. In the conditions of instability of the modern economy, the banking market can not be risky. The risk is in any bank activity, but it can be at different levels. In addition, the current risk management is to monitor important indicators and timely adopt operative decisions on banking transactions.

Keywords

bank risks, credit organization, profitability, stability, equity, risk management, competition, instability, financial markets, active transactions, internal control, bank system, banking supervisor authorities, executive management

JEL classifications

G20 , G21

URI

http://jssidoi.org/jesi/article/585

DOI

DOI 10.9770/jesi.2020.7.4(46)

Pages

3269-3285

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Creative Commons Attribution 4.0 International License