Financial Institutions Risk Management

Financial institutions risk management involves identifying, assessing, and mitigating risks that banks, insurers, and investment firms face in their operations. These risks can include credit risk (the possibility of borrowers not repaying loans), market risk (fluctuations in investment values), and operational risk (failures in internal processes). Effective risk management helps institutions safeguard their assets, maintain stability, comply with regulations, and ensure they can meet their financial obligations. By actively managing risk, financial institutions can protect themselves and their customers from potential losses and ensure long-term sustainability in a changing economic environment.