Prepared By Sayed Ishtique Alam Basit Roll No: 190101611162 ALLIANCE UNIVERSITY Project Proposal Risk Management in Banking Industry
Table of Contents Introduction to Risk Management Risk Rick Management Process involved 01 Objectives of Risk Management Effective Risk Management Challenges and Impact 02 Methodology Basel I Accord Basel II Accord Comprehensive Capital Analysis and Review Resolution and Recovery Planning03 Types of Risk Considered in Banking Credit Risk Liquidity Risk Market Risk Solvency Risk 04 Project Task Recovery and Resolution planning Calculating projections for risk Capital requirement to fund bankruptcy 05
1.1Risk: In a synthetic sense, riskis the variability of results under the pressure of factors from the environment in which the organisation operates. Risk can be regarded from the viewpoint of uncertain events that might affect the strategic, operational and financial objectives. Risk is a measure of the inconsistency between different possible results, obtained under more or less favorable or unfavorable conditions(Mihalcea & Androniceanu, 2000). There is always the distinction between risk and uncertainty. Riskcan be related to a situation in which various possible effects might occur and there is a past relevant experience that would allow obtaining some statistics to estimate the effects. Uncertainty occurs where there are various past effects but the previous statistics do not allow estimating them(Drury, 1992). 1.2Risk management is characterized by the management of a large volume of information. Thus, there is the necessity of having the risk management whose main purpose is to give the banking institution the possibility to meet its objectives provided that the unexpected part of the revenue, the one that results from unexpected events, quantifies the real risk of the business. Risk management (Ciuhureanu, 2005) aims a better achievement of business objectives and the successful implementation of strategies. Risk management provides the necessary elements to answer the complexity of risk monitoring. The concept of risk management consists both of preventing and minimizing the occurrence of certain events and also in their system of identification, evaluation and quantification. Moreover, the risk management goes through development stages, being of great usefulness nowadays in the implementation of measures for diminishing losses that might occur. 1.3Process Involved: The following are the processes involved in the process of Risk Management. i.Identifying Risk ii.Measuring Risk and determine which risk are important to real with. iii.Examine solutions to deal with the risk iv.Implement solutions to deal with the risk v.Monitor results and publish to regulators 1. Introduction
2.1Objectives of Risk Management is maintaining the acceptable profitability ratios of the safety and liquidity parameters in the management of assets and liabilities (minimize losses). The purpose of risk
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- Summer '16
- Basel II, Capital requirement