Risk Typologies and Their Mitigation in Banking: A Study of Azerbaijani Banks

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Risk Typologies and Their Mitigation in Banking: A Study of Azerbaijani Banks

Journal Title: Scientific Research - Year 2024, Vol 4, Issue 10

Abstract

Abstract This paper explores the typologies of risks in the banking sector and examines the strategies employed to mitigate them, with a focus on Azerbaijani banks. The study identifies key risk categories, including credit risk, market risk, liquidity risk, and operational risk, each of which plays a critical role in the financial health and profitability of banks. The research highlights that credit risk, driven by loan defaults, remains the most significant concern for Azerbaijani banks, while market risks, particularly from currency fluctuations, also pose major challenges. Effective risk mitigation strategies, including collateralization and diversified lending practices, are essential to maintaining stability in this emerging market. Additionally, the study emphasizes the importance of integrating modern risk management technologies and adhering to international regulatory standards. Azerbaijani banks that adopt advanced monitoring systems and proactive risk management frameworks demonstrate improved financial performance and resilience in the face of economic volatility. The findings underscore that well-implemented risk management practices are crucial for enhancing profitability and ensuring long-term sustainability in the banking sector.

Authors and Affiliations

Marhamat Bayramov

Keywords

EP ID EP751919
DOI 10.36719/2789-6919/38/57-60
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