The most important types of risks, which commercial banks face, can be classified as follows:
• Interest rate risk, which arises from the different maturity structure of the banks’ assets and liabilities.
• Liquidity risk, which is the risk that a bank may not be able to meet its cash needs by selling assets or raising funds at a reasonable cost.
• Credit risk, which is the risk of changes in the economic value of the bank’s assets due to unexpected changes in the creditworthiness of counterparties.
• Operational risk, which includes the risk of damages caused by human and technological factors.