The process of risk management in financial business

Risk management has become one of the most important managementfunctions within banks and financial institutions. Its role is even moreimportant during the current world economic crisis, with the aim ofsaving assets and preserving future profit. Serbian banks have recentlystarted to introduce overall risk management function in line with BaselII agreement and take care of all sorts of risks. During recent years, ahigher level of risk has been present in crisis circumstances, which meansthat Serbian banks have to be more careful than before. There have beenclear signs of deterioration of the structure of banking assets, but hopefully,this negative trend was stopped. At the same time, one can pointout that domestic banks are in better position compared to the banks incountries within the region.