Publication:
Analyzing and Managing Banking Risk : A Framework for Assessing Corporate Governance and Financial Risk Management, Second Edition

Loading...
Thumbnail Image
Files in English
English PDF (16.26 MB)
2,887 downloads
English Text (774.73 KB)
572 downloads
Date
2003-04
ISSN
Published
2003-04
Author(s)
Brajovic Bratanovic, Sonja
Editor(s)
Abstract
This publication aims to complement existing methodologies by establishing a comprehensive framework for the assessment of banks, not only by using financial data, but also by considering corporate governance. It argues that each of the key players in the corporate governance process (such as shareholders, directors, executive managers, and internal and external auditors) is responsible for some component of financial and operational risk management. Following a holistic overview of bank analysis in Chapter 2, the importance of banking supervision in the context of corporate governance is discussed in Chapter 3. This chapter also considers the partnership approach and the emerging framework for corporate governance and risk management, as well as the identification and allocation of tasks as part of the risk management process. The framework for risk management is further discussed in Chapters 4 through 11.
Link to Data Set
Citation
Brajovic Bratanovic, Sonja; Van Greuning, Hennie. 2003. Analyzing and Managing Banking Risk : A Framework for Assessing Corporate Governance and Financial Risk Management, Second Edition. © World Bank. http://hdl.handle.net/10986/14949 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections

Related items

Showing items related by metadata.

  • Publication
    Analyzing Banking Risk : A Framework for Assessing Corporate Governance and Risk Management, Third Edition
    (World Bank, 2009-04-01) Brajovic Bratanovic, Sonja; Van Greuning, Hennie
    This publication aims to complement existing methodologies by establishing a comprehensive framework for the assessment of banks, not only by using financial data, but also by considering corporate governance. It argues that each of the key players in the corporate governance process (such as shareholders, directors, executive managers, and internal and external auditors) is responsible for some component of financial and operational risk management. Following a holistic overview of bank analysis in chapter two, the importance of banking supervision in the context of corporate governance is discussed in chapter three. This chapter also considers the partnership approach and the emerging framework for corporate governance and risk management, as well as the identification and allocation of tasks as part of the risk management process. The framework for risk management is further discussed in chapters four through eleven.
  • Publication
    Analyzing Banking Risk (4th Edition)
    (Washington, DC: World Bank, 2020-06-08) Brajovic Bratanovic, Sonja; Van Greuning, Hennie
    This publication provides a comprehensive overview of topics focusing on assessment, analysis, and management of financial risks in banking. It emphasizes risk management principles and stresses that key players in the corporate governance process are accountable for managing the different dimensions of financial and other risks. This fourth edition remains faithful to the objectives of the original publication. The new business aspects affecting banking risks, such as mobile banking, and regulatory changes over the past decade—specifically those related to Basel III capital adequacy concepts—have been included, as have new operational risk management topics, such as cybercrime, money laundering, and outsourcing. This publication will be of interest to a wide body of users of bank financial data. The target audience includes the persons responsible for the analysis of banks and for the senior management or organizations directing their efforts. Because the publication provides an overview of the spectrum of corporate governance and risk management, it is not aimed at technical specialists of any particular risk management area.
  • Publication
    Risk Analysis for Islamic Banks
    (Washington, DC: World Bank, 2008) Iqbal, Zamir; Van Greuning, Hennie
    This publication provides a comprehensive overview of topics related to the assessment, analysis, and management of various types of risks in the field of Islamic banking. It is an attempt to provide a high-level framework (aimed at non-specialist executives) attuned to the current realities of changing economies and Islamic financial markets. The Islamic financial system is not limited to banking; it also covers capital formation, capital markets, and all types of financial intermediation and risk transfer. Islamic finance was practiced predominantly in the Muslim world throughout the middle ages, fostering trade and business activities with the development of credit. The growth of Islamic finance coincided with the current account surpluses of oil-exporting Islamic countries. The Middle East saw a mushrooming of small commercial banks competing for surplus funds. The Islamic Republics of Iran, Pakistan, and Sudan announced their intention to make their financial systems compliant with Shariah.
  • Publication
    Financial Sector Assessment Program : Brazil - Basel Core Principles for Effective Banking Supervision
    (World Bank, Washington, DC, 2012-04) International Monetary Fund; World Bank
    Brazil has a well-defined banking supervision process supported by a legal framework that grants the Banco Central do Brasil (BCB) broad enforcement powers for corrective action and weak bank resolution. This assessment of the Basel Core Principles (BCP) for effective supervision was conducted from February 27 through March 20, 2012. As agreed with the authorities, the supervisory framework was assessed against the BCP methodology issued by the Basel Committee on Banking Supervision (BCBS) in October 2006. In self-assessment the authorities addressed both essential and additional criteria and the assessors based their conclusions on compliance with both criteria. The last BCP assessment was conducted in 2002, however, the grading is not comparable to this assessment as the principles and methodology were revised in 2006. Although the BCB operates on an independent mode, there are amendments to Law 4595-1964 (banking law) that will aid in protecting the continuation of the operational independence.
  • Publication
    Financial Sector Assessment Program Update : Saudi Arabia - Basel Core Principles for Effective Banking Supervision
    (World Bank, Washington, DC, 2011-09) International Monetary Fund; World Bank
    This assessment of Saudi Arabian Monetary Agency's (SAMA) compliance with the basel committee's core principles for effective banking supervision was conducted by a mission to Saudi Arabia during April 9-20, 2011. The assessment was carried out as part of a Financial Sector Assessment Program (FSAP) update undertaken by the International Monetary Fund (IMF) and the World Bank at the request of the Saudi authorities. The authorities requested that the assessment of compliance be conducted using only the essential criteria in the methodology. This assessment was based on a review of laws, regulations, policies and practices in place at the time. The financial system is subject to risks reflecting the openness of the economy and dependence on the hydrocarbon sector, as well as the size of the market. Saudi Arabia implements International Financial Reporting Standards (IFRS) for banks and insurance companies and is served by the major accounting firms. There has been no need to provide emergency liquidity assistance (ELA) to any bank in recent years. The conditions in which SAMA will provide ELA would be determined on a case-by-case basis, as will the terms on which such ELA will be provided.

Users also downloaded

Showing related downloaded files

  • Publication
    World Development Report 2018
    (Washington, DC: World Bank, 2018) World Bank
    Every year, the World Bank's World Development Report takes on a topic of central importance to global development. The 2018 Report, Learning to Realize Education's Promise, is the first ever devoted entirely to education. Now is an excellent time for it: education has long been critical for human welfare, but is even more so in a time of rapid economic change. The Report explores four main themes. First, education's promise: Education is a powerful instrument for eradicating poverty and promoting shared prosperity, but fulfilling its potential requires better policies - both within and outside the education system. Second, the learning crisis: Despite gains in education access, recent learning assessments show that many young people around the world, especially from poor families, are leaving school unequipped with even the most foundational skills they need for life. At the same time, internationally comparable learning assessments show that skills in many middle-income countries lag far behind what those countries aspire to. Third, promising interventions to improve learning: Research from areas such as brain science, pedagogical innovations, or school management have identified interventions that promote learning by ensuring that learners are prepared, that teachers are skilled as well as motivated, and that other inputs support the teacher-learner relationship. Fourth, learning at scale: Achieving learning throughout an education system will require more than just scaling up effective interventions. Change requires overcoming technical and political barriers by deploying salient metrics for mobilizing actors and tracking progress, building coalitions for learning, and being adaptive when implementing programs.
  • Publication
    World Development Report 2017
    (Washington, DC: World Bank, 2017-01-30) World Bank Group
    Why are carefully designed, sensible policies too often not adopted or implemented? When they are, why do they often fail to generate development outcomes such as security, growth, and equity? And why do some bad policies endure? This book addresses these fundamental questions, which are at the heart of development. Policy making and policy implementation do not occur in a vacuum. Rather, they take place in complex political and social settings, in which individuals and groups with unequal power interact within changing rules as they pursue conflicting interests. The process of these interactions is what this Report calls governance, and the space in which these interactions take place, the policy arena. The capacity of actors to commit and their willingness to cooperate and coordinate to achieve socially desirable goals are what matter for effectiveness. However, who bargains, who is excluded, and what barriers block entry to the policy arena determine the selection and implementation of policies and, consequently, their impact on development outcomes. Exclusion, capture, and clientelism are manifestations of power asymmetries that lead to failures to achieve security, growth, and equity. The distribution of power in society is partly determined by history. Yet, there is room for positive change. This Report reveals that governance can mitigate, even overcome, power asymmetries to bring about more effective policy interventions that achieve sustainable improvements in security, growth, and equity. This happens by shifting the incentives of those with power, reshaping their preferences in favor of good outcomes, and taking into account the interests of previously excluded participants. These changes can come about through bargains among elites and greater citizen engagement, as well as by international actors supporting rules that strengthen coalitions for reform.
  • Publication
    Causes of Deforestation of the Brazilian Amazon
    (Washington, DC: World Bank, 2004) Margulis, Sergio
    The worldwide concern with deforestation of Brazilian Amazonia is motivated not only by the irreversible loss of this natural wealth, but also by the perception that it is a destructive process in which the social and economic gains are smaller than the environmental losses. This perception also underlies the diagnosis, formulation and evaluation of public policies proposed by government and non-governmental organizations working in the region, including the World Bank. The present work suggests that a fuller understanding is necessary with regard to the motivations and identity of the agents responsible for deforestation, the evaluation of the social and economic benefits from the process and the resulting implications of public policies for the region. The objective of the report is to show that, in contrast to the 1970s and 1980s when occupation of Brazilian Amazonia was largely induced by government policies and subsidies, recent deforestation in significant parts of the region is basically caused by medium- and large-scale cattle ranching. Following a private rationale, the dynamics of the occupation process gradually became autonomous, as is suggested by the significant increase in deforestation in the 1990s despite the substantial reduction of subsidies and incentives by government. Among the causes of the transformation are technological and managerial changes and the adaptation of cattle ranching to the geo-ecological conditions of eastern Amazonia which allowed for productivity gains and cost reductions. The fact that cattle ranching is viable from the private perspective does not mean that the activity is socially desirable or environmentally sustainable. Private gain needs to be contrasted with the environmental (social) costs associated with cattle ranching and deforestation. From the social perspective, it is legitimate to argue that the private benefits from large-scale cattle ranching are largely exclusive, having contributed little to alleviate social and economic inequalities. The study notes, however, that decreases in the price of beef in national markets and increases in exports caused by the expansion of cattle ranching in Eastern Amazonia may imply social benefits that go beyond sectoral and regional boundaries.
  • Publication
    A Cost Effective Solution to Reduce Disaster Losses in Developing Countries : Hydro-Meteorological Services, Early Warning, and Evacuation
    (World Bank, Washington, DC, 2012-05) Hallegatte, Stéphane
    In Europe, it can be estimated that hydro-meteorological information and early warning systems save several hundreds of lives per year, avoid between 460 million and 2.7 billion Euros of disaster asset losses per year, and produce between 3.4 and 34 billion of additional benefits per year through the optimization of economic production in weather-sensitive sectors (agriculture, energy, etc.). The potential for similar benefits in the developing world is not only proportional to population, but also to increased hazard risk due to climate and geography, as well as increased exposure to weather due to the state of infrastructure. This analysis estimates that the potential benefits from upgrading to developed-country standards the hydro-meteorological information production and early warning capacity in all developing countries include: (i) between 300 million and 2 billion USD per year of avoided asset losses due to natural disasters; (ii) an average of 23,000 saved lives per year, which is valued between 700 million and 3.5 billion USD per year using the Copenhagen Consensus guidelines; and (iii) between 3 and 30 billion USD per year of additional economic benefits. The total benefits would reach between 4 and 36 billion USD per year. Because some of the most expensive components of early warning systems have already been built (e.g., earth observation satellites, global weather forecasts), these investments are relatively modest, estimated here around 1 billion US per year, reaching benefit-cost ratios between 4 and 36.
  • Publication
    The Role of Desalination in an Increasingly Water-Scarce World
    (World Bank, Washington, DC, 2019-03) World Bank
    The cost of desalination has been plummeting over the years. As a result, desalination has become a viable option for certain strategic uses. Today, over 20,000 desalination plants in more than 150 countries supply about 300 million people with freshwater every day. Initially a niche product for energy rich and water scarce cities, particularly in the Middle East, the continued decrease in cost and environmental viability of desalination has the potential to significantly expand its use - particularly for rapidly growing water scarce coastal cities. Desalination can be seen as one option in a portfolio water supply sources, including traditional surface water and groundwater sources as well as wastewater reuse, to meet growing water demand gap. Although still relatively expensive, desalination offers the potential to enhance system reliability. As renewable sources of energy such as wind and solar expand, and as advances in concentrate management techniques make discharges from desalination plants much cheaper and safer, the prospect of producing freshwater from the sea without increasing greenhouse gases and without significant damages to the local environment become more promising.