Geopolitical risks
The economic structure around the globe is becoming increasingly complex and trade conflicts and military tensions are posing various risks for national economies, companies and financial institutions. In such a situation of uncertainty, proactive risk management is more important than ever for banks. The current FIRM position paper Banks Navigating Global Crises: Analysis of Geopolitical Risks and their Impact on the Financial Sector summarizes what needs to be considered, how scenarios are defined, quantified and appropriate mitigation measures derived.
The authors Gerold Grasshoff, Dr. Til Bünder and Emilia Zimermann look at the potential impact of recent developments in China, the Middle East and the political change of course in the USA. The analysis focuses on German and European banks: how do geopolitical risks affect their credit, market, liquidity, business, sanctions and cyber risks? The position paper offers comprehensive guidelines for dealing with geopolitical challenges in the financial sector.