38th Annual Student Research Conference
Risk Management Strategies in Financial Institutions
Mitchel D. Hoffman*, Connor S. Baxley, and Parker C. Erickson
Prof. Charles Boughton , Faculty Mentor
Financial institutions face credit, market, operational, and liquidity risks, requiring effective risk management for stability. This paper explores risk management frameworks used by banks and investment firms, along with key regulatory guidelines. These frameworks help assess, measure, and mitigate risks while ensuring compliance.
Historical failures, such as the 2008 financial crisis, highlight weaknesses in risk assessment, particularly in subprime mortgage lending and financial derivatives. Collapses like Lehman Brothers and AIG exposed the dangers of poor risk controls and excessive leverage, leading to stricter regulations and enhanced risk management practices.
Credit ratings influence investment decisions by assessing financial instruments’ creditworthiness, while market risk—driven by interest rates, exchange rates, and asset prices—requires advanced modeling techniques. Institutions use diversification, hedging, and scenario analysis to mitigate risks.
As financial risks evolve, institutions must continually improve risk strategies, comply with regulations, and learn from past failures to enhance resilience and maintain investor confidence.
Keywords: Finance, Regulation, Risk, Investment, Diversification, Strategies, Market, Creditworthiness
Topic(s):Business Administration
Presentation Type: Oral Presentation
Session: TBA
Location: TBA
Time: TBA