Major Risks Facing the International Banking System

Abstract:     
Every investment and financing decision as well as operational activities undertaking by a bank under uncertain conditions is associated with some form of risk This paper presents an abridgment of the major risks confronting international banks, such as: operational risk, interest rate risk, credit risk, liquidity risk, foreign exchange risk and political risk; with a broader emphasis on systemic risks. There is a call for a global monetary policy to deal with risks that confront the international banking community. While fiscal policies play critical roles in ensuring sound banking system, many industry experts and practitioners argue that these financial regulatory policies are not sufficient in addressing the main risks in the international banking industry.

Number of Pages in PDF File: 20

Keywords: Risk, Bank, Systemic Risk, Derivatives, Regulation, Policy

JEL Classification: E44, E5, E6, F3, G15, G18, G2

working papers series