




































                     American International Journal of Multidisciplinary Scientific Research 

Vol. 6, No. 4; 2020 

                                       ISSN 2638-1249   E-ISSN 2638-1273 

Published by CRIBFB, USA 

 

15 

MITIGATE BANK RISK: SOME REVIEW  

 
 

Hasan Zaman 

Independent Researcher 

 

 

 

 

ABSTRACT 

Its goal and intent is to examine the structure of capital adequacy, whether or not regulatory 

regulation is complied with and how shocks from financial and economic stress can be absorbed 

by the bank's prescription. 

 

Keywords: Mitigate, Bank Risk. 

 

In 2004, in view of some of the problems not covered by Basel I, the Basel Committee on 

Banking Supervision submitted a revised framework commonly known as the Basel II 

Agreement. Three pillars remain in Basel 2.Capital adequacy is the first pillar. Pillar 1's core 

goal is to capitalize credit institutions well. Banks have 10% of total risk-weighted assets to 

maintain the minimum capital requirement (MCR).  

Capital banks are more than 10%and capitalized banks are also considered.8% indicated 

undercapitalized and 5% undercapitalized substantially. Column 2 is the firm examination by 

national authorities of the adequacy of capital and prudential supervision. Pillar 3 is an active 

application of market discipline to promote reliable financial information. Credit risk, market 

risks, and operational risk is addressed in Basel 2.In these three areas of risk, the bank must 

reassure the capital adequacy of each exposure. 

It has a distinctive Islamic financial system that must be properly addressed when 

formulating the Islamic financial organizations' capital guidelines. Leverage cannot be produced 

significantly in this system, which played an important part in the recent financial crisis. Islamic 

financial products should be linked to real business activities such as trade, manufacturing etc. 

These articles cannot be underpinned by another financial contract because Shariah restricts debt 

trading and unreasonable speculation. As Islamic financial products are asset-based, they are 

frequently more likely to pose market risk (probability of loss of lower market prices).They also 

have certain other unique risks such as displaced trade risks (commercial force to pay returns that 

exceed the rate that has been earned on its assets financed by mudaraba depositors). 

 

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https://doi.org/10.46281/ijbmf.v4i2.785

