THE SIGNIFICANCE OF RISK MANAGEMENT FOR BANKS AND OTHER FINANCIAL INSTITUTIONS

Risk management is an area that is experiencing rapid growth and it entails many and various perspectives and views of factors that are involved, how they are conducted and their uses. As a consequence of global financial crisis, regulators and financial industry leaders agree on the need for a comprehensive risk management reform in the financial field. Even though solutions may differ, most agree that the lack of an appropriate risk management system was one of the key factors in causing the financial crisis. This paper provides a literature review on sound risk management governance for banks and other financial institutions.