RISK MANAGEMENT TOOLS PRACTICED IN TUNISIAN COMMERCIAL BANKS

The main purpose of this study is to explore the current risk management practices and techniques used by Tunisian banks. A questionnaire was developed and surveyed to 16 commercial banks operating in Tunisia. This paper attempts to ascertain the perceptions of Tunisian bankers about the importance of transparency and public disclosure and the understanding of the bank’s risk profile. Among others, the results indicate that the Tunisian bankers are aware of the importance and the role of effective risk management in reducing costs and improving bank performance. Furthermore, the Tunisian banks have implemented some effective risk strategies and risk management frameworks. In addition, the credit risk exposure methods are still underused by the Tunisian banks. Similarly, collateral and guarantees continue to be the most commonly used risk mitigation methods to provide support to credit facilities in Tunisian banks. The paper discusses and analyses the current practices in risk management of Tunisian banks. It identifies the tools and methods used in managing credit risk, market risk, liquidity risk and operational risk by Tunisian banks. No previous research had examined tools practiced in risk management by Tunisian banks.