Bachelor's thesis (Turku University of Applied Sciences) Degree Program in Business Management

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Bachelor's thesis (Turku University of Applied Sciences) 
Degree Program in Business Management 
International Business Management 
2012 
Artem Vorobyev 
INVESTMENTS IN 
COMMERCIAL BANKING 
– core concepts and risk management strategies 

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BACHELOR´S THESIS | ABSTRACT
TURKU UNIVERSITY OF APPLIED SCIENCES 
Degree programme in Business Management | International Business Management 
2012| 133 pages 
Instructor: Markku Heikkila 
Artem Vorobyev 
INVESTMENTS IN COMMERCIAL BANKING: 
CORE CONCEPTS AND RISK MANAGEMENT 
STRATEGIES
What factors promote investment activities in the banking sector? Which 
hedging instruments could be used in order to limit corresponding risk exposure 
and, thus, safeguard investment operations of large financial intermediaries? 
How is it possible to explain the foundations behind recent European crisis? 
These and many other questions serve as dynamic forces behind current 
Thesis paper. 
While initial research objective was to conduct a profound study of the role that 
commercial banking investments maintain in contemporary financial markets, 
the scope of the investigation has been substantially expanded in order to focus 
on major concepts of investment risks and, therefore, explore potential negative 
aftermath for institutional investors. 
Gradually, the concepts of liquidity (solvency) and profitability have been 
introduced as the cornerstones of investment banking: depending on the size of 
financial institution, the focus of investment activities could be shifted in favour 
of either liquid assets or profitability margins and, thus, greater financial 
hazards.
Further analysis of risk management strategies has been supplemented with 
empirical examination of five major financial institutions in Finland. Even though 
initial research methods centred on the interview questionnaire, subsequent 

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