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Risks In Banking Systems Essay

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Below is an essay on "Risks In Banking Systems" from Anti Essays, your source for research papers, essays, and term paper examples.

Without a doubt, the technological growth has considerably affected theprofile of Bank risks and financial institution formation more generally. Someof these risks are increased, while others on the contrary are possible to bedecreased. In any case, the growth of electronic banking has created a newbasis with regard to the degree of exposure to the risk and thereforeconsequently the need of not only a differentiated regulating frame, but alsomechanisms of monitoring to be formed, which has already begun to beshaped in the fields of Basle Committee of Banking Supervision. The degreeof exposing to risks, which are related to the electronic banking, dependsmainly on the degree of adopting new alternative electronic means of distribution of services and products.
The business risk is the risk of not being able to achieve the business targetsdue to inappropriate strategies, inadequate resources or changes in theeconomic or competitive environment. It has to do with the ability the creditinstitution has in order to achieve the operational objectives by exploitingthe available opportunities in the market. The big changes on the bankingsector and the adoption of fast paced evolving technology also change thetraditional strategic risks. A bank that will rush into the adoption of new technologies so that is rendered pioneer is risking losing its investment asinformation systems lose their value in very short time interval. Moreover,there is the risk of extensive investment in particular products or services,which will not become acceptable by the end users. On the other hand, if itmaintains a more conservative attitude there is the risk of becoming last, inan environment where the competition is moving fast and strengthens itsplace in the market. Internet banking may soon convert from a complementary to the main provider of financial services and products.
Consequently, a possible failure of a bank entering this sector, can havevarious consequences on its future position...

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