BANK RISK MANAGEMENT TOOLS AND TECHNIQUES

Abstract

Banks are exposed to several kinds of financial and non-financial risks. Hence, risk management is practiced on a regular basis by banks in order to manage and control the risks that they encounter during their operations and those that they may face in the future. Risk management is important in the banking and financial sector because the way banks control and address risks affect the success or failure of their projects or the institutions themselves. The main aim of this article is to highlight the risk management tools and techniques that banks adopt in order to reduce and minimize their exposure and thus survive so as not to end up in bankruptcy or out of business. This study concludes to the importance of risk management and its techniques in improving banks' financial and operational performance and to the achieve its goals.