RISK MANAGEMENT IN CONVENTIONAL BANKING

Presented By

Syeda Qurrat-ul-ain Kazmi Saba Azhar Sara Anjum Samar Suleman

Presentation Contents
Introduction Title of Proposal Background of Risk Management Adoption of Methodologies

 Objective

of the Study

To examine the degree to which the conventional banks use risk management practices and techniques in dealing with different types of risk
Significance Scope

of the Topic

of the Study

What is risk management?

What are key risks associated with banking Market risk Credit risk Operational risk Performance risk Exposure Liquidity Investment Country Reputational Strategic

 Identification
Measure Decision

of risks

the potential effect of handling

Title of Proposal
RISK MANAGEMENT IN CONVENTIONAL BANKING

Problem Statement
To identify the risks which the managers face and establishing such procedures which may help them to overcome these risks

BACKGROUND OF RISK MANAGEMENT

If everything is a matter of luck, risk management is a meaningless exercise. Invoking luck obscures truth, because it separates an event from its cause. (Peter Bernstein)

1921 Frank Knight publishes Risk, Uncertainty and Profit 1933 The U.S. Congress passes the Glass-Steagall Act 1945 the U. S. Congress passes the McCarran-Ferguson Act In 1966 The Insurance Institute of America develops a set of three examinations that lead to the designation Associate in Risk Management In 1974 Gustav Hamilton, the risk manager for Swedens Statsforetag, creates a risk management circle In 2000 the widely-heralded Y2K bug fails to materialize in large measure because of billions spent to update software systems.

LITERATURE REVIEW

Commercial Bank Risk Management: An Analysis of the Process (Anthony M. Santomero) Seven Myths of Risk (Sven Ove Hansson) Knowledge Management as Risk Management: A Need for Open Governance? (Clive Smallman)

TYPES OF RISKS FROM MANAGEMENT PERSPECTIVE

Risks, eliminated or avoided by simple business practices Risks that can be transferred to other participants Risks that must be actively managed at the firm level.

HOW ARE RISKS MANAGED IN BANKS

Standards and reports Position limits or rules Investment guidelines or strategies Incentive contracts and compensation

Bank Risk Management Systems

HYPOTHESIS

If information management is done effectively then the risk management can be done efficiently

METHODOLOGY Collection of Data and Instrument Sample Size DESIGN OF THE RESEARCH Field experiment

Time (the research will take) Cross sectional research Under 4 months

Finance Self financed Budget

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