The process of risk management in financial business

Abstract

Risk management has become one of the most important management functions within banks and financial institutions. Its role is even more important during the current world economic crisis, with the aim of saving assets and preserving future profit. Serbian banks have recently started to introduce overall risk management function in line with Basel II agreement and take care of all sorts of risks. During recent years, a higher level of risk has been present in crisis circumstances, which means that Serbian banks have to be more careful than before. There have been clear signs of deterioration of the structure of banking assets, but hopefully, this negative trend was stopped. At the same time, one can point out that domestic banks are in better position compared to the banks in countries within the region.