Analyzing Banking Risk: A Framework Assessing Corporate Governance and Financial Risk Management

This publication provides a comprehensive overview of topics related to the assessment, analysis, and management of financial risks in the field of banking. It is an attempt to provide a high-level framework (aimed at non specialist executives) attuned to the current realities of changing economies and financial markets. This approach emphasized the accountability of key players in the corporate governance process in relation to the management of different dimensions of financial risk. In the past decade, rapid innovations in financial markets and the internationalization of financial flows have changed the face of banking almost beyond recognition. Technological progress and deregulation have both provided new opportunities for and increased competitive pressures among banks and nonbanks alike. In the late 1980s, margins attained from the traditional business of banking began to diminish and capital adequacy requirements began to increase. Banks have responded to these new challenges with vigor and imagination by forging ahead into new arenas.