Although underdeveloped, the banking system in Ethiopia has witnessed a significant expansion over the past few years. The National Bank of Ethiopia (NBE) believes such growth should be matched to strong risk management practices. As a result, the NBE has revised the risk management framework it issued in 2003 to all banks so as to incorporate latest developments in the area.
These revised guidelines, consistent with international standards and best practices, are expected to provide minimum risk management (risk identification, measurement, monitoring and control) standards for all banks operating in the country. It covers the most common and interrelated risks facing banks in the country, namely, credit, liquidity, market and operational risks. The guidelines are thus expected to assist risk-based supervision and contribute towards safety and soundness of the banking system.
The guidelines cover the following topics:
1. Credit Risk Management Guidelines
2. Liquidity Risk Management Guidelines
3. Market Risk Management Guidelines
4. Operational Risk Management Guidelines