Section V: Finance and Banking

Title: Competitiveness and the transformation of banking risk management with implications for Arab banks

Author(s): Moh'd Mahmoud Ajlouni

Address: Chairman, Department of Banking and Finance, Faculty of Economics, Yarmouk University, Irbid, Jordan

Reference: BUSINESS EXCELLENCE AND COMPETITIVENESS IN THE MIDDLE EAST AND NORTH AFRICA pp. 242 - 252

Abstract/Summary: Structural changes along with growing activity in the international capital and financial markets have led to the birth of the Age of Risk. This paper aimed at providing some preliminary thoughts for banking risk management, with the purpose of providing Arab banking institutions with some guideline on risk management. The importance of this subject comes from the latest structural changes that affect banks main role in the economy. That is their financial intermediation role. This paper emphasis that banking risk management has developed overtime to encounter new risks arisen from changing regulation, markets and economies. It shows how such changes influenced and reshaped todays banking business and what classes of banking risks should be considered in banking risk management. It recommends that Arab banks should perform new roles such as promoting investments, investing in the stock and bonds markets and underwriting securities. The purpose of such new functions is to extend diversification and to transform banking risk management from risk-averse to managed and controlled risk-taker.

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