Banking Financial Mauritian

Download .pdf, .docx, .epub, .txt
Did you like this example?

During the past 10 years, there have been great changes in the Mauritian banking sector and this is a continuing process that will not stop here. This is mostly because of fast innovations in the financial markets and the internationalization of the financial flows. Other factors like technological development and deregulation have both triggered competitive pressures and also provided new opportunities among banks.

Don’t waste time! Our writers will create an original "Banking Financial Mauritian" essay for you whith a 15% discount.

Create order

But these opportunities are also subject to complex risks that challenge traditional approaches to banking risk management. These factors have influenced the financial world on the international level and the Mauritian banking sector has not been left unaffected.

The growth of international financial markets banks have been exposed to a wider access to funds. As a result of which banks have been developing new products, services and techniques. The receipt of deposits and granting of loans, being the traditional banking practice, is today only one part of a bank’s activities.

These new instruments have also drawn interest to areas where financial risks were earlier thought to be relatively unimportant. Hence banks are now exposed to a greater variety of risks and their ability to measure, monitor and steer risks accordingly is becoming a decisive parameter for their survival.

The aim of this project is to provide an overview of the management process of financial risks in our Mauritian banking sector as risk is the fundamental element that influences the financial behavior.

  • Banking Risks

Banks are faced with a wide array of risks in their course of their operations, as illustrated in the figure below. In general, risks are categorised into three different parts: Financial Risks, Operational Risks and Business Risks.

Figure 1: Categories of Banking Risks

Banking Risks

Financial RisksOperational Risks Business Risks

  • Interest Rate Risk 1) Business Strategy Risk1) Legal Risk.
  • Foreign Exchange Risk 2) Internal System and Operational Risk 2) Policy Risk.
  • Credit Risk 3) Technology Risk 3) Systemic
  • Liquidity Risk 4) Management and Fraud (Country) Risk.

Source: Annual Report on Banking Supervision 2000 – BOM

Financial risk concern the effective management and control of the finances of an organisation and the effects of external factors such as availability of credit, foreign exchange rates, interest rate movement and liquidity risk. For this project only the financial side of Risk Management is going to be considered. Focus will be on the four main types of risks which are:

  • Interest rate Risk is the risk borne by an interest-bearing asset, for example in this case a loan, due to variation in interest rates.
  • Foreign Exchange Risk is a form of risk that crop up due to the change in price of one currency against another.

Do you want to see the Full Version?

View full version

Having doubts about how to write your paper correctly?

Our editors will help you fix any mistakes and get an A+!

Get started
Leave your email and we will send a sample to you.
Thank you!

We will send an essay sample to you in 2 Hours. If you need help faster you can always use our custom writing service.

Get help with my paper
Sorry, but copying text is forbidden on this website. You can leave an email and we will send it to you.