Banks play an important role in the economy by acting as intermediaries between those who have surplus funds and those who need financing. They collect deposits from savers and use this money to issue loans to individuals and businesses, fueling economic growth. However, this activity exposes banks to various risks that must be carefully managed, such as credit risk from borrower defaults, interest rate risk, liquidity risk, and operational risks. Effective risk management is crucial to ensuring a bank's long-term survival and profitability.