DIVERSIFICATION STRATEGIES FOR MANAGING RISKS IN COMMERCIAL BANKS AND ENSURING FINANCIAL STABILITY THROUGH THEM
DOI:
https://doi.org/10.5281/zenodo.17744623Keywords:
diversification, commercial banks, financial stability, credit risk, income diversification, funding structure, operational risk, banking regulation, Basel standardsAbstract
This article analyzes the role of diversification strategies in managing risks and ensuring the financial stability
of commercial banks. It examines the theoretical foundations, practical dimensions, and empirical significance of
diversification across credit portfolios, income sources, funding structures, geographic coverage, and operational
activities. The study emphasizes how diversification enhances resilience against market volatility, reduces concentration
risks, and supports sustainable long-term growth. Special attention is given to the relevance of diversification for banking
systems undergoing structural reforms and digital transformation, particularly in emerging economies
References
1. Basel Committee on Banking Supervision. Principles for the Management of Credit Risk. – Basel: BIS, 2000. – 56 p.
2. Basel Committee on Banking Supervision. Sound Practices for the Management and Supervision of Operational Risk.
– Basel: BIS, 2003. – 92 p.
3. Jorion P. Financial Risk Manager Handbook. – Hoboken: Wiley, 2011. – 752 p.
4. Saunders A., Cornett M. Financial Institutions Management: Risk Management Approach. – New York: McGraw-Hill,
2019. – 816 p.
5. Mishkin F. The Economics of Money, Banking, and Financial Markets. – New York: Pearson, 2019. – 736 p.
6. Fabozzi F., Modigliani F. Capital Markets: Institutions and Instruments. – Boston: Pearson, 2010. – 728 p.
7. Allen L., Guo H. Basel III and Risk Management. – London: Palgrave Macmillan, 2018. – 312 p.
8. Stulz R. Risk Management Failures During the Financial Crisis. – Journal of Financial Economics, 2010. – 97(3). – P.
439–460.
9. Laeven L., Levine R. Bank Governance, Regulation and Risk Taking. – Journal of Financial Economics, 2009. – 93(2).
– P. 259–275.
10. Demirgüç-Kunt A., Detragiache E. Financial Liberalization and Financial Fragility. – IMF Working Paper. – Washington
D.C.: IMF, 1998. – 35 p.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 GREEN ECONOMY AND DEVELOPMENT
This work is licensed under a Creative Commons Attribution 4.0 International License.