The five greatest risks to banks

News and Trends in Financial Services

 

Banks are considered to be stable, reliant and dull by the world, or that’s what we would like them to be.

Instead banks are inherently risk managers, as we have now specifically realised in the past five years.

Banks can be basket cases if they manage risk badly or high return investment vehicles if they manage risk well, but it’s all about risk management.

This is because banks make money out of lending and the art of lending is to ensure the customer will pay back and pay back at a profit with interest.

This is the basics of banking and goes back to usury in the times of the Romans.

It all sounds so simple, and it is, but the complexity of the modern world is breaking that simplicity.

Just thirty years ago, the simplicity was there because we had just two types of risk to manage: market…

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