ABSTRACT
This chapter discusses three aspects of bank risk management with particular emphasis on Malaysia: tracing its evolution, learning from global best practices, and identifying potential future challenges. This is done by reviewing pertinent publications and annual bank reports with the purpose of identifying the key themes that address this chapter's aims. The four key findings are: (i) risk-related regulations have intensified; (ii) banks have improved their risk management practices, culminating in enterprise-wide risk management and continuous development; (iii) global best practices include enhancing conduct and culture, derisking, adopting the fortress balance sheet concept, intensifying stress-tests, improving security analytics, facilitating discussions between cross-functional asset and deposit-strategy groups, incorporating forward-looking macroeconomic indicators in risk models, and improving the risk-reward link; and (iv) there may be future challenges confronting risk management professionals in increased regulation, rapid technological changes, newer emerging risks, and the need for pertinent broad-based competencies. The findings contribute to enhancing knowledge in this important but under-researched area of risk management among Malaysian banks, policy makers' reflection on optimizing regulations for banking sector resilience, and providing global best practices ideas for practitioners' consideration.
