Risk management a critical tool in nigeria banking institution

Abstract

Risk management has emerged as a critical pillar in ensuring the stability and sustainability of financial institutions across the globe, and Nigeria is no exception. In an increasingly volatile economic landscape, Nigerian financial institutions—ranging from commercial banks to insurance companies, microfinance institutions, and investment firms—face a plethora of risks that can threaten their operations, profitability, and survival. These risks include credit risk, market risk, operational risk, liquidity risk, compliance risk, and reputational risk, all of which must be carefully identified, assessed, and mitigated. The global financial crises, episodes of currency devaluation, fluctuating oil prices, political instability, and regulatory inconsistencies have further heightened the importance of robust risk management frameworks.