Assessment of Risk Management Analysis in Ethiopia Banking Sectors
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Date
2021-07
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A.A.U
Abstract
The purpose of this article is to examine the effectiveness of commercial banks' risk
management practices in Ethiopia. Using a contemporaneous mixed study approach, data was
collected from 17 purposefully sampled commercial banks. 108 respondents from
commercial banks were given open-ended and closed-ended questionnaires. The
questionnaires asked about the importance of risk management practices, risk identification,
risk monitoring, and the nature of risk management practices, among other things. The
paper's main conclusions are that risk managers consider risk management to be critical to
their bank's performance; credit risk, operational risk, liquidity risk, interest rate risk, and
foreign exchange risk are the types of risks that cause the most exposures; current risk
management practices have a reasonable level of success, and banks are implementing some
of the approaches/techniques. Overall, the findings suggest that Ethiopian banks are indeed
risk-averse. Some recommendations were made, including that banks should prioritize risk
management training for their employees, make risk visible, measurable, and manageable,
and embed a meaningful risk culture throughout all processes and activities
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Keywords
Risk Management Analysis