Institutions such as banks 

create contracting and governing mechanisms

that address agency issues enough to secure investment from minority
shareholders and investors. As a bank examiner, major signals to look for a bank
that is failing to engage in good risk management include market, operational,
credit, and liquidity risk. A comprehensive database that contains extensive
information on bank ownership frameworks, governance structures, risk
management tools, and risk levels including compliance, reputation, strategic,
and operational risks. This data enables us to correlate differences in corporate
structure to impacts on corporate regulations, risk occurrences, and banks'
mitigation strategies, including portfolio structuring course of option. Inadequate
planning could result in an inaccurate assessment and knowledge of the risks
linked to new operations, as well as insufficient oversight and control. The
capabilities of a bank to manage risk greatly affect the investor's decisions.
Implementing prudent methods, and strengthening operating systems are all
ways to reduce risk. Even if a bank generates significant revenues, poor risk
management might result in lesser profits due to significant losses.

Major risks for Banks. Corporate Finance Institute. (2022, January 28). Retrieved April 22, 2022,
from https://corporatefinanceinstitute.com/resources/knowledge/finance/major-risks-for-
banks/

Bank examiners’ information and expertise and ... - NBER. (n.d.). Retrieved April 21, 2022,
from https://www.nber.org/system/files/working_papers/w24460/w24460.pdf