ANALYSIS OF INTERDEPENDENT RISKS OF INVESTMENT BANKING: IMPLICATIONS FOR FINANCIAL STABILITY AND EFFICIENCY

Risk management in banks' investment activities is increasingly relevant amid market volatility and systemic uncertainty. Traditional approaches often ignore the interaction between risks, limiting management effectiveness. This study aims to enhance risk management by considering the cumulative impact of transformation, credit, interest rate, and default risks. A refined classification and quantitative framework are proposed. Findings highlight the key role of transformation risk in interest rate exposure and the importance of balanced resource strategies. Empirical evidence shows that rising default risk, if uncompensated by returns, reduces investment efficiency. Quantitative models help identify critical risk points, while decision-making quality proves vital for financial resilience and stability.