EXAMINATION OF RISK MANAGEMENT IN THE BANKING INDUSTRY (A CASE STUDY OF FIRST BANK OF NIGERIA)

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EXAMINATION OF RISK MANAGEMENT IN THE BANKING INDUSTRY (A CASE STUDY OF FIRST BANK OF NIGERIA) ( Economics Project Topics)

 

CHAPTER ONE

INTRODUCTION

1.1         Background to the Study

The banking industry as a financial institution is indispensable machinery and plays a paramount role in the process of economic growth and development. This acknowledgement is reinforced by contemporary conceptualization of mobilizing resources from surplus units and channeling some of it to deficit units. The growing dynamic of business environment therefore has created ambivalences necessitating control and coordination most especially in the financial institutions. This ambivalence has parallel movement with risk organization today conduct business under the condition of uncertainty, thus the analysis of this uncertainty entail processes to measure the degree of risk involved. To this end, it would be impossible to understand fully the centre point of this study without looking at the meaning of risk and examination of risk management.

Risk is defined as the chance of having a loss due to occurrence of an event. The risk is always associated with the loss aspects since the world itself has the association of danger of loss. The definition can be ”probability of the occurrence of an event resulting in loss/gain (Rajaram et al 2009).

Similarly, according to Dickson and Stein (1999) risk is the likehood that the hazard will indeed cause the peril to operate and cause the loss. However in order to operate and appreciate the need for loss prevention and implementation measures to achieve same, the efforts are not only aimed to prevent a loss happening, but also to make it manageable if it happens. This task is to be achieved in all activities of the organization be in it production, storage, handling, transportation and distribution. The basic process of risk planning risk control and risk financing is integrated into a process known as examination of risk management.

Rejda (2005) is of the view that examination of risk management is a process that identified loss exposures faced by an organization and selects the most appropriate techniques for treating such exposures. Examination of risk management ensures that organization identified and understands the risk to which it is exposed. Examination of risk management also guaranties that the organization creates and implements an effective plan to prevent losses or reduce the impact if a loss occurs.

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EXAMINATION OF RISK MANAGEMENT IN THE BANKING INDUSTRY (A CASE STUDY OF FIRST BANK OF NIGERIA) ( Economics Project Topics)

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