A General Risk Management Framework

Understanding from our previous discussion that increased market volatility and competition have led, among other things, to an increased level of risk for most participants in banking, it is useful to adopt a general risk management framework for treating the subject. Risk management can be defined generally as the management of events that cannot be predicted. Since many of the by-products of increased risk cannot be predicted and are potentially damaging to an institution if not handled properly, an organised and methodical approach to the management of risks is warranted.