The Realty of Risk Management of Commercial Banks according to Basel Conventions 3

Abstract

   The research mainly aims at identifying to what extent the Libyan commercial banks are applying the main points of banking risk management principles. It also attempts to determine the extent of which the Libyan commercial banks are applying the conventions of Basel 3 committee for controlling and monitoring banks in the field of risk management. To achieve the research purpose, two main hypotheses were developed, and five commercial banks were involved. Conducting questionnaires was adopted as a main tool for gathering relevant data. For the analysis of the collected data, descriptive and inferential statistics were utilized. The research revealed a moderate practice of banking risk management principles. It also showed that the banks in question do not apply the requirements of Basel convention 3 in terms of banking risk management. Based on the research results, several recommendations have been concluded. The main ones include that, for their major role in minimizing banking risk, principles of banking risk management should be applied in Libyan commercial banks. Another recommendation is the availability of the proper tools of detecting such risk, such as using certain plans, allocations, alternatives, and pr ecautions to face any risks and mitigate their effects. Banks are also required to ascertain working methods for risk management that suffice the prerequisites of the capital according to Basel convention 3. 

Key words:  Principles of Banking Risk Management and Basel3.