Assessment of Risk Management Practice in Ethiopian Commercial Banks
No Thumbnail Available
Date
2024-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
The purpose of this research is to “assess the risk management practices of Ethiopian commercial banks. The study is used descriptive survey method and applies a mixed method research strategy for each stratify as representative sample by taking the quantitative method as major component while the qualitative method plays a supplementary role. Data was collected from purposely selected commercial banks permanent staff and analysis was carried out using descriptive statistics supporting by SPSS v 23. Based on the descriptive and analytical analyses results of the questionnaire data, Likewise, the overall usefulness of the risk management practices in selected banks found well prefund by the managing risk based on the empirical data analysis. This thesis unveils higher mean of agreement between the managing market risk and the risk management practices. These results indicate that the managing liquidity risk is also another valuable aspect to improve the usefulness of the risk management practices of selected commercial banks. Furthermore, the descriptive statistics result stated that managing liquidity risk with the risk management practices has been found and endorses that it is important for the management to give more consideration to deal with the liquidity risk in order to bring improvement in the risk management practices of all banks. This study further confirms the role of managing operational risk in the whole banking risk management approach and has found moderates of implementations of the managing operational risk and the risk management practices in selected commercial banks is strongly minimized its risk. The main conclusions of this paper are selected banks should develop a common understanding about the strategy, policy and procedures across the bank and under no circumstance should the bank violate the limit set by NBE and finally prepare training for risk related staffs to manage risk effectively and efficiently. Therefore, the banking sector and other related sectors should be introduced with the necessary work to be completed on this subject, nonetheless by making a start with the determination of the road maps and national initiatives.
Key words: Risk Management Practice, Basel principles, selected commercial Banks,