Year: 2025
Type: article
Abstract: The main focus of this essay is the critical importance of bank risk management during turbulent times. This study explores the diverse sources of risk that banks face, including inflation, interest rate fluctuations, quantitative easing policies, and the soundness of banks’ internal policies. Additionally, it examines whether risk management strategies are effective, and considers factors such as bank liquidity, credibility, market risks, and the influence of Federal Reserve policies. These risks collectively pose significant threats, including the potential for bank insolvency or collapse. Given such volatility, robust risk management practices are imperative for banks to safeguard their stability. This essay underscores the multifaceted nature of risks, emphasizing the need for a holistic approach to their analysis. It concludes that effective management of liquidity, credit, and market risks is paramount. Moreover, depositor confidence is identified as a cornerstone of banking stability, highlighting the vital importance of maintaining a strong reputation. Ultimately, the findings reinforce that comprehensive and proactive risk management is essential for banks to navigate uncertain economic conditions and ensure long-term resilience.
DOI: 10.54097/g2y6mh96
Author: Xinyi Li
Institution: Hong Kong Metropolitan University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4409648794