Risk is a very important aspect to consider in the banking sector. The risk model used in the developed economies can be very attractive, but very misleading when used in the emerging economies. This paper analyzes the need for enterprise risk management (ERM) in the banking sector in the emerging economies. Further, it tackles the relationship between market and credit risk in emerging economies banking sector. Despite the technical problems, such as, the lack of historical data to work with in the emerging economies and the markets inefficiency that I faced while doing this paper, this study shows, on a relatively small scale, that market and credit risk affects one another, and proves ERM as a very important tool to enhance risk measurement and supervision in the banking sector. This paper show that despite the fact that not a lot of banks out of my sample crystallize the interaction between market and credit risk, still, they point a number of factors contributing to such outcome. The results end to an important implication that ERM has to be implemented in the emerging economies banking sector, while the current regulatory framework should be changed to accommodate the ERM program.


Management Department

Degree Name

MS in Finance

Graduation Date


Submission Date

May 2015

First Advisor

Hassanien, Medhat Hassenien

Committee Member 1

Farooq, Omar Farooq

Committee Member 2

Makary, Samir Makary


133 p.

Document Type

Master's Thesis

Library of Congress Subject Heading 1

Risk management.

Library of Congress Subject Heading 2

Risk assessment.


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Institutional Review Board (IRB) Approval

Not necessary for this item


First and foremost, I am very thankful to my father and mother for their support, without them nothing would be possible. Thank you Dad for tolerating my hard times and believing in me no matter what happened. I would like to express my deep gratitude to Dr. Medhat Hassenien, without your support and belief; I would not have finished this thesis. I am deeply grateful to Dr Medhat for his continuous backup and the time he invested to improve my research. The experience to work along such a distinguished professor cannot be described by mere words. It was such a fulfilling experience that helped me learn a lot. Thank you will never be enough Dr. Medhat. I am forever and ever grateful for your precious time. Furthermore, I am very grateful to my reviewers Dr. Samir Makary and Dr. Omar Farooq. I would like to thank Dr. Omar Farooq for his constant support and time, without you doctor things would not have been easy. You were always ready to help and you never gave up on me. Also I would like to thank Dr. Ahmed El Shahat for his belief in me and his time that he was very generous with. I am very thankful to Dr. Samir Makary for his help and support during my thesis. I am very grateful for the time he spent with me. Moreover, I would like to thank Dr. Diaa Nour El Din for his help with the model. I would like to thank Dr. Mohammed Bouaddi for his effort and support with the model as well. Last but not least, I would like to thank Ghada El Eraqi for her assistance with the data. You always found the time to help me with a lot of different resources. I am also thankful to my sweet sisters for tolerating this hard time with me and supporting me all the way. Last but not least I would like to thank Mohamed Alaa Salma for his help with editing this paper and for his endless support.