Risk Management Strategies in Financial Institutions During Economic Crises
Keywords:
risk management, financial institution, economic crisis, liquidity risk, credit risk, capital adequacy, stress testing, internal governanceAbstract
This study examined the risk management strategies adopted by financial institutions during economic crises. The research focused on key risk types (credit risk, liquidity risk, market risk, operational risk) and evaluated strategies such as capital buffers, asset diversification, liquidity management, and enhanced governance. A survey of 150 banking-sector risk managers and secondary data from 20 financial institutions (2018–2023) were analyzed. Results suggested that institutions that maintained higher capital adequacy ratios, diversified assets, conducted regular stress testing, and enforced strong internal risk governance fared better—maintaining solvency and liquidity—compared to those with weaker frameworks. The findings highlighted the importance of comprehensive risk management frameworks and proactive risk mitigation, especially during systemic economic downturns.
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