Financial Risk Management in the Banking Sector of Georgia in Condition of the Pandemic

Banking sector acts as a monetary policy implementer and intermediary between creditors and borrowers. The development of market economy is incredible without the development of banking system and its successful functioning. Financial risk and management issues are becoming more and more important in the modern global economy. Enhancing the role of financial risk management, analysis of the financial situation and making the right decisions in the activities of financial institutions are crucial factors in condition of global financial capital movement.Various methods are used to avoid loss and losses. Study and implementing of these methods in Georgian reality is very important.
The thesis “Financial Risk Management in the Banking Sector” discusses the classification of financial risks and presents the ways of reducing and avoiding them. The main goal of financial risk management is to strengthen the banking system and also protect the interests of consumers, which provides solvency of the sector. Therefore, the issue is relevant for the both: banking business community and the society.
The work also discusses the negative role of the financial crisis of banking sector caused by the COVID-19 pandemic. There are developed certain viewpoints of improving financial risk management.
The aim and objectives of the research are to analyze the role of financial risks in the banking sector, the involvement of the National Bank in identifying the risks of commercial banks. Also discuss the levers with which banks operating in Georgia try to minimalize risks, representing new levers and methods.
The findings and recommendations of the research will make it possible to increase the effectiveness of financial risk management. Considered changes are important for the progressive functioning of commercial banks because it will reduce the financial risks for both borrowers and depositors, which in turn will improve the performance of commercial banks.