Monitoring Standards Regulation Risk of Bans in Serbia

Risks are common to all aspects of banking. Therefore, not even neutral banking is risk proof. List of risks becomes longer as new instruments, new techniques and strategies, financial engineering, and new banking products, especially financial products, are introduced. This mainly refers to system risks and especially risk as a result of lack in banking management in dealing with unknown distant areas and markets and unknown instruments and techniques. Risk management is part of bank business policy, and can also be defined as bank’ s function of providing risk proof deals. In order to avoid risk, or at lest to lessen the risk to an acceptable level, it is necessary to analyze and manage risks. Risk analysis should underline key points and process of risk occurring. All bank resources can be exposed to risks, directly or indirectly, through liability towards a third party, market risks and other. The general goal of banking risk management is to create optimal relation between risks and income. This results in two basic of banking risk management. Firstly, avoiding being insolvent. Secondly, maximum increase in income rate on the amount with corrections according to risks