The Impact of Monetary and Economic Policies on Risk Management in Banks

Abstract

This study explores the intricate relationship between monetary and economic policies and
their profound impact on risk management within the banking sector. The objective of this research is to
comprehensively examine how various monetary and economic policies, such as interest rate adjustments,
inflation monitoring, and economic growth, affect risk management in banks.
The research employs a multi-faceted approach, including descriptive and analytical methods, to
understand the potential effects of monetary policies on bank risk management. It also examines the
implications of interest rate fluctuations and their impact on bank performance. Furthermore, it addresses
the consequences of inflation control measures on credit and market risk management. The research
suggests that these events can lead to changes in banking and financial risks.
The key findings of this research highlight that changes in monetary and economic policies significantly
influence the risk profiles of financial institutions. These shifts require banks to adapt and continuously
enhance risk management strategies.
In conclusion, this summary underscores the utmost importance of aligning risk management practices in
banks with ever-changing monetary and economic policies to effectively mitigate potential risks. It
emphasizes the importance of directing banks' attention towards how these policies align with their
objectives and sustainability. It forms a crucial foundation for understanding how banking institutions can
thrive in a continually evolving economic landscape.