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Bank
risk is a necessity if you are to do any meaning
business. No one has enough money to invest in any meaningful business.
The
banks
are therefore there to receive deposits and finance different projects
for bank
customers by way of giving out loans to deserving customers.
Bust
as said above, bank risk stares you in the face each
time you get involved with a bank. The issue
of Bank risk is even more serious if
you use the online banking facility of your
bank. A resent Internet banking risk assessment carried out by an
independent
body, commissioned by a certain consumer protection group, found that
banking credit risk is very high…electronic
banking risk being usually an
endemic online risk that gives
vent a lot of bank risk Banking credit
risk can be in many forms, especially wrong debiting of customers
account and
identity theft.
Determining
your banking risk
tolerance involves several different
things. First, you need to know how much money you have in your account
at
every given time and how much you are withdrawing, and what your
investment and
financial goals are, because if all you do is deposit money in a
current
account for your spending, you are feeding the bank’s share
holders and staff
at your own detriment, and sooner or latter you will overdraw your
account and
be in red.
Banking
risk can also
be very high if you bank with a small rural bank with attendant high
liquidity
risk portfolio. Another potential banking risk is domiciled in foreign
banking,
especially if industry banking is involved without adequate insurance
banking
counterpart required to safe guard offshore risk.
Most
bank customers have no idea of when to apply lean
banking nor do they have any training on risk management
techniques, and most
banking policy are not really understood
by the average bank customer bringing about a high degree of bank risk
for
unsuspecting bank customers who are willing banking money without know
the bank
risks they face.
It
is instructive to note that the banking capital banks use
are mostly money collected from individuals and industry as deposits
and that
the banks themselves also have lending risks, because
some loans, especially in developing
countries become bad and unredeemable, which makes bank risk a two
prong
affair.
For
instance, banking in Malaysia,
and Nigeria
are
of high note bank risk than Hong Kong
banking. Treasury
risk in Hong Kong is
far less in comparison with treasury risks in both Nigeria
and Malaysia,
so bank risk is also a societal issue.
In those climes retail banking is more than whole sale or industry
banking.,
which goes to show why their economies are usually small too.
Banking
assets are usually bloated in poor economies,
because the rate of bank asset growth surpasses the rate of industrial
growth,
since banks are usually left with surplus money the would have given
out as
loan to industry as risk enterprises.
Bank
definition in such economies therefore are quite
different from bank definition in
the United States
where bank risk in the minimum.
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