Risk Management Practices in the Banking Sector: A Comparative Analysis

Abstract

A robust and effective risk management system is the cornerstone of a stable and thriving banking sector. This article delves into the diverse landscape of risk management practices across international banking systems, comparing and contrasting approaches in different regions and economies. Drawing upon relevant social science theories and empirical evidence, it analyzes the influence of economic structures, regulatory frameworks, and cultural factors on risk management strategies. The article explores key areas of risk management focus, including credit risk, liquidity risk, operational risk, and market risk, highlighting the unique challenges and best practices employed in each domain.This study conducts a comprehensive comparative analysis of risk management practices within the banking sector. The research aims to provide insights into the diverse strategies employed by banks to identify, assess, and mitigate risks in today's dynamic financial landscape. Through an extensive review of literature and empirical data, the study examines how various banking institutions worldwide approach risk management, highlighting both similarities and differences in their methodologies. The analysis encompasses a range of risk categories, including credit risk, market risk, operational risk, and regulatory compliance. Additionally, the study explores the impact of macroeconomic factors, technological advancements, and regulatory changes on the evolving landscape of risk management within the banking industry. The findings contribute to a deeper understanding of effective risk management practices, offering valuable implications for both academia and practitioners in the financial sector.