Financial Stability in Volatile Currency Economies: Recalibrating Risk Compliance for Systemic Banking Resilience

Abstract

One of the most pressing problems of the banking system in the volatile currency economies is financial stability since the exchange rate fluctuations can increase the systemic risks and jeopardize the overall economic stability. This paper examines ways of rebalancing risk compliance frameworks to increase the stability and resilience of financial institutions. Through the capital adequacy, liquidity management, and regulatory practices, the study determines how the banks can counter the negative implication of currency volatility. The results show the significance of both dynamic risk policies and adaptive stress testing; as well as organized regulatory control, as a means of protecting the banking systems against systemic shocks. The research gives some viable suggestions that can be adopted by policymakers and financial institutions to enhance the management of risks and guarantee sustainable financial stability in volatile economic conditions.