COMPLIANCE WITH BASEL STANDARDS AND PRACTICES OF RISK MANAGEMENT - TRENDS AND CHALLENGES OF THE MACEDONIAN BANKS
Research Article
COMPLIANCE WITH BASEL STANDARDS AND PRACTICES OF RISK MANAGEMENT - TRENDS AND CHALLENGES OF THE MACEDONIAN BANKS
ABSTRACT
The risk management process is a continuous process that is constantly evolving. As the world changes, the activities of banks change, there is a need for new types of products, new ways and practices for operation, new software solutions. Organizational schemes, security policies, etc. are also changing. Everything leads to the emergence of new risks or the re-emergence and intensification of existing, controlled risks. There is a need for new fresh capital or more productive use of available resources for more efficient multiplication of existing capital. Therefore, permanent evolution and upgrading of the risk and capital management system is required, both domestically and internationally. The Basel standards that are being developed in order to strengthen the banking sector and introduce additional market discipline have the ultimate goal of strengthening the capital of banks and improving the practices in risk management, i.e. the financial landscape of a national economy. In this paper special attention is given to the compliance of the Macedonian banks with the application of the Basel standards and the recommendations of the Basel Committee for Banking Supervision (BCBS) on the best practices of risk management. Primary goal is to demonstrate why is necessary domestic regulation to be harmonized with Basel standards and to what extend the Macedonian legislation complies with it. Particularly, in the paper progress is presented of the Macedonian banks in implementing the Basel III regulatory reforms in a full, timely and consistent manner. The analysis shows that Macedonian banks have made particular progress towards meeting the Basel III capital requirements. Capital and liquidity ratios are on satisfactory level and have generally remained stable in the first half of the year beside the impact of Covid-19. However, the Macedonian legislation lags behind and there is still room for further harmonization with Basel’s standards and practices of risk management. Analytic and field research was used for the preparation of the paper. Surveying as well as analysis and synthesis methods have been applied. Internet was used as a major tool to approach to data and literature. Additionally, tables and graphical methods have been employed for visual presentations during the research.
PARNARDZIEVA STANOEVSKA, E.,
(2020). COMPLIANCE WITH BASEL STANDARDS AND PRACTICES OF RISK MANAGEMENT - TRENDS AND CHALLENGES OF THE MACEDONIAN BANKS. Trends in Economics, Finance, and Management Journal, 2(2), 43-58. Arrival Date Posted By:https://tefmj.ibupress.com/articles/compliance-with-basel-standards-and-practices-of-risk-management---trends-and-challenges-of-the-macedonian-banks
