A legal mechanism for commercial bank risk management

This master‘s thesis analyses the concept of risk in general, defines the commercial banks risk management’s legal mechanism, and elucidates main aspects of this definition. In the view of author commercial banks risk management’s legal mechanism consists of: 1) requirements for establishing bank in order to reduce or avoid the risk of potentially unreliable subjects getting into financial sector, 2) requirements for banks in their practice, so that banks would estimate risk before taking it, and have a reserve funds to hedge against possible losses, 3) supervision, which ensures that these two parts of commercial banks risk management’s legal mechanism would work in practice fluently, and in case of crisis would introduce preventative actions to minimize systematic risk, and losses for other subjects. The author analyses the main sources for creating framework for commercial banks risk management’s legal mechanism in national law: Basel minimum standards for capital adequacy which is the basis for domestic rule-making and adoption procedures, which aligns regulatory capital requirements more closely to the underlying risks that banks face, and European Capital Requirements Directive, which adopts Basel capital adequacy accords. The next part of this master’s thesis deals with national implementation of these frameworks, and looks for imbalance within international regulation, and finaly introduces the risk management in commercial banks, as outcome of previously introduced legal expedient