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Generally speaking, risks in the bankingsector are of two types namely Systematic Risks and Commented [PS5]: Possible source:
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Unsystematic Risks.
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Systematic risks: https://www.oliveboard.in/blog/types-of-risks-in-banks/
This risk is genetic inthe entire market or, say apart of the market, andcan affect a large number of Commented [PS7]: Possible source:
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assets.
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Thisrisk is also known asundiversifiable risk or volatilityand market risk. https://www.oliveboard.in/blog/types-of-risks-in-banks/
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Thisrisk affects theentiremarket and not justthestock or industry in particular. https://www.oliveboard.in/blog/types-of-risks-in-banks/
This type of risk cannot be avoided completely and it is completely unpredictable. Commented [PS10]: Possible source:
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Examples of this include interest rate changes, inflation, recession and wars.
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Unsystematic Risks: https://www.oliveboard.in/blog/types-of-risks-in-banks/
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This is a risk that affects a very small number of assets.
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Also known as non-military risk, specific risk, miscellaneous risk and residual risk. Commented [PS13]: Possible source:
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This type of risk refers to the uncertainty associated with investing in a company or a particular
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industry. https://www.oliveboard.in/blog/types-of-risks-in-banks/
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Examples include a change in management https://www.oliveboard.in/blog/types-of-risks-in-banks/
, product returns, a regular change that can lead to a decline in Commented [PS16]: Possible source:
company sales, and a new https://www.oliveboard.in/blog/types-of-risks-in-banks/
rival to the market Commented [PS17]: Possible source:
in which you https://www.oliveboard.in/blog/types-of-risks-in-banks/
invest in a company can capture market share. Commented [PS18]: Possible source:
It is possible to avoid https://www.oliveboard.in/blog/types-of-risks-in-banks/
non-systemic risks through diversity. Commented [PS19]: Possible source:
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In addition to these broad categories ofrisks there are other major issues as well that banking
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industries mainly faces. That are discussed below: https://www.oliveboard.in/blog/types-of-risks-in-banks/
Inabilityof the bank torespectgovernment / regulatory commitmentsby the government Commented [PS50]: Possible sources:
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Violations of Code of Conductunder corporate governance https://gomedici.com/risks-in-the-banking-industry-faced-
by-every-bank?__s=k5yfbnxarkhh5uiay8ov
Mismanagement/ manipulation of user records Commented [PS51]: Possible sources:
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Effectivecustomer service / after-sales services https://gomedici.com/risks-in-the-banking-industry-faced-
by-every-bank?__s=k5yfbnxarkhh5uiay8ov
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Capital adequacy risk: The risk is that the bank Insufficient capital to support its development or https://gomedici.com/risks-in-the-banking-industry-faced-
unable to meet the legally defined capital needs. by-every-bank?__s=k5yfbnxarkhh5uiay8ov
Regulatory risk: The risk of non-compliance with regulatory requirements, regulatory change or Commented [PS53]: Possible sources:
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regulators' expectations https://gomedici.com/risks-in-the-banking-industry-faced-
by-every-bank?__s=k5yfbnxarkhh5uiay8ov
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