Українська
Vovchenko, O.
(2021).
Development of the banks’ risk management system under conditions of uncertainty.
Economics of Development,
20(4),
8-15.
https://doi.org/10.57111/econ.20(4).2021.8-15
English
Article
Development of the banks’ risk management system under conditions of uncertainty
Received 07.09.2021, Revised 19.11.2021, Accepted 20.12.2021
Abstract
Due to economic globalization, changes in the regulatory environment, technological shifts and geopolitical events, banks face uncertainty that has a negative impact on their financial stability. It is important for banking institutions to develop an effective risk management system that will help identify, control and mitigate emerging risks. The goal of the study was to substantiate current directions for transforming the banks’ risk management system to secure anti-crisis regulation and financial stability. Monitoring of the banking sector financial stability has been carried out based on determining the probability of a financial crisis, applying an indicative method; economic and statistical methods of information collection and analysis, formalization, systematization and modelling have also been applied in the article. The importance of a risk-oriented approach to conducting banking business as a basis for counteracting destabilizing factors of influence has been considered. Securing the bank’s financial stability under conditions of uncertainty provides for integration of its risk management system into the structure, linking all other management subsystems at the strategic, tactical and operational levels. Bank risk management has been considered not as a separate independent function of bank management, but as a component of the institution’s adaptive management system, integrated with strategic and tactical planning, performance management, internal control and audit. It has been determined that in order to ensure the bank’s adaptability and its quick response to changes in the financial market it is necessary to introduce changes into the risk management system in the following directions: establishing the responsibility of the bank’s top management and its owners for the bank’s performance at the legislative level; improving the corporate governance and promoting its reliability; forming the bank’s risk culture. The study is useful for banking specialists who can use recommendations for the development and improvement of the risk management system under conditions of uncertainty. The given material can serve as an important source of information for regulatory bodies, supervisory institutions in policy making and setting standards of the risk management system in banks
Keywords:
influence factors, instability, express diagnostics, probability, financial crisis, lines of defence
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