THE BANK RISK MANAGEMENT MECHANISM (THE CYBERNETIC APPROACH)
The establishment of a flexible and dynamic bank risk management system is a crucial condition for a stable and profitable operation of banks. The risk management system of a commercial bank is understood both in the broad and narrow sense. In the broad sense, the banking risk management system is v...
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| Format: | Article |
| Language: | Russian |
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Government of the Russian Federation, Financial University
2017-10-01
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| Series: | Финансы: теория и практика |
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| Online Access: | https://financetp.fa.ru/jour/article/view/326 |
| Summary: | The establishment of a flexible and dynamic bank risk management system is a crucial condition for a stable and profitable operation of banks. The risk management system of a commercial bank is understood both in the broad and narrow sense. In the broad sense, the banking risk management system is viewed upon as the following set of components: international risk management standards and adopting institutions; the state regulation of monetary relations including the monetary policy; the central bank activities; mechanisms of state supervision and control of the activities of lending institutions as well as other measures that may have a direct or an indirect impact on the state of the banking system. In the narrow sense, the risk management system means a system of regulation and supervision of the central bank activities based on federal laws, rules and regulations as well as organizational structures and risk management mechanisms used by commercial banks. The formal difference between the banking risk management mechanism and the risk management system is that the former has a particular object and management tools. The risk management mechanism consists of several levels: international, national and intra-bank. It includes the following interrelated elements: governance, risk management mechanism tools, information, resource, management object. Based on the research findings, the paper presents the structure of the bank risk management mechanism, describes its elements and defines the main objectives to be achieved with the management mechanism. |
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| ISSN: | 2587-5671 2587-7089 |