Conclusion

Banks are unique financial intermediaries as they are highly leveraged which put them in control of very large volume of public fund.They also administered the payment and settlement system which is the backbone of any economy. A loss of public confidence in a bank can lead to run on the bank causing systemic failure.

Banking is the business of money where high risks are involved. Dergulation and globalization have introduced new types of risk.risk may be defined as an exposure to a transaction with loss,which occurs with some profitability and which can be expected,measured and minimized. An element of risk is inherent in the banking operation. Banks have to manage and balance the risk.

Banks are now involved in a variety of activities from basic leading to trading complex instrument,engaged in off balance sheet transactions and have ventured in new markets, which have increased the risk management challenges.

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