Enterprise Risk Management and Shadow Banking Systems

Abstract

Banking regulations are beneficial to limit bank' portfolios against excessive risk-taking. The introduction of enterprise risk management (ERM) allows banks to enhance their capabilities to identify risks accurately and manage them to minimize unexpected costs or losses. During the last few years, the European Court of Auditors highlighted the importance of “special reports” that examine the economy, efficiency, and effectiveness of EU spending. This European institutional focus argues that shadow banking improves welfare because it provides a channel to escape excessive regulation that is asymmetrically more valuable for banks or European paying agencies with access to efficient investment opportunities. Performance audits, alongside traditional financial and compliance audits, allow the EU to understand, validate, and reform their own policies and programs. This study contributes theoretically and empirically regarding the fraud and management bad practice of agile marketing concepts in the context of digital transformation and international business.