Session
Management, Business and Economics
Description
Risk management is a vital component of internal control and refers to the process of identifying and analyzing risks in achieving the organization's objectives and in defining a suitable risk mitigation response. This means:
✓Identification of the risk
✓Risk Assessment and Classification
✓ Assessing the organization's appetite for risk
✓ Prepare a Risk Response
Also, risk management should be reviewed and reported in order to monitor whether a risk profile is changing or not, to obtain guarantees that risk management is effective and to identify further action that is needed.
Typical problems related to risk management that are encountered are:
➢ Senior managers are not aware of the responsibility they have for implementing it and / or do not seem to want to implement it.
➢ Mid-level managers are afraid to apply risk management as they may not want to accept the risks / weaknesses in their current work arrangements.v
➢ Where risk is managed, it is often implemented at the end of the internal control process, rather than at the beginning.v
As risk management refers to the process of identifying and analyzing risks to the achievement of objectives, this management requires financial institutions to set their business objectives and then carry out a risk analysis to see if these objectives are possible realized. Risk management can be seen as a bridge between the control environment and the control of activities, since it is precisely on the basis of the risk analysis that internal controls need to be set up. If the risk analysis is done after the internal controls have been set up, then it is unlikely that these controls will be the appropriate ones to cope with the risks.
Keywords:
Financial Institutions, Liquidity Risk, Market Risk.
Session Chair
Naim Preniqi
Session Co-Chair
Muhamet Gërvalla
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-550-19-2
First Page
50
Last Page
57
Location
Pristina, Kosovo
Start Date
26-10-2019 5:15 PM
End Date
26-10-2019 6:45 PM
DOI
10.33107/ubt-ic.2019.380
Recommended Citation
Govori, Arbiana and Sejdija, Qemajl, "Globalization of Banking Business and Risk Management" (2019). UBT International Conference. 380.
https://knowledgecenter.ubt-uni.net/conference/2019/events/380
Included in
Globalization of Banking Business and Risk Management
Pristina, Kosovo
Risk management is a vital component of internal control and refers to the process of identifying and analyzing risks in achieving the organization's objectives and in defining a suitable risk mitigation response. This means:
✓Identification of the risk
✓Risk Assessment and Classification
✓ Assessing the organization's appetite for risk
✓ Prepare a Risk Response
Also, risk management should be reviewed and reported in order to monitor whether a risk profile is changing or not, to obtain guarantees that risk management is effective and to identify further action that is needed.
Typical problems related to risk management that are encountered are:
➢ Senior managers are not aware of the responsibility they have for implementing it and / or do not seem to want to implement it.
➢ Mid-level managers are afraid to apply risk management as they may not want to accept the risks / weaknesses in their current work arrangements.v
➢ Where risk is managed, it is often implemented at the end of the internal control process, rather than at the beginning.v
As risk management refers to the process of identifying and analyzing risks to the achievement of objectives, this management requires financial institutions to set their business objectives and then carry out a risk analysis to see if these objectives are possible realized. Risk management can be seen as a bridge between the control environment and the control of activities, since it is precisely on the basis of the risk analysis that internal controls need to be set up. If the risk analysis is done after the internal controls have been set up, then it is unlikely that these controls will be the appropriate ones to cope with the risks.