- Reliability. The system must operate continuously and smoothly. - Optimality. Optimum control system characterized establishment between the elements of rational relations at all levels. - Cost. Cost includes obtaining the necessary result in minimum cost [23,26,55]. Credit risk management system not only allows banks ensure their profitability and efficiency lending, but Advancing the bank loan is its role in the circulation of money. Issued and defaulted loans during this period increased money supply in the country, contributing to inflation. Credit risk management system includes object entities software tools and subsystems (Table 1.1). Table 1.1 - System Credit Risk Management Elements of upravlinnyaHarakterystyka elementa12 Object - individual credit risk (the risk of a particular borrower); - Portfolio credit risk (the risk of the portfolio), Subjects General Meeting shareholders (participants), the board, the board; - Credit Committee,
system not only allows banks ensure their profitability
Credit risk management system must meet certain requirements.
Credit risk management system must meet certain requirements. Among them: - Integrity. The control system should be consistent, because violation of integrity may change the relationships between parts system and its operation mechanism. - Resistance. The control system must remain effective in to external and internal factors. - Commitment. Commitment involves the development of goals and objectives and ways to achieve them. - Flexibility. Flexibility is the ability and willingness to change in result of the emergence of new problems. - Uniformity. Uniformity implies the subordination of all elements of the principles of construction and operation. - Efficiency. The system must be operational in order to for during the adoption and enforcement of no change has occurred in which implementation of decisions is irrelevant.
implementation of proper analytical
dnoshennya return and risk. The purpose of this activity is to create conditions creditor protection by setting limits and diversification of loan terms, implementation of proper analytical diagnosis of the financial condition of the borrower, which should include analysis of the client's cash flow and a comprehensive analysis of its creditworthiness, the choice of the optimal form of collateral. [21] Credit risk is an integral part of the banking risks, which a specific strategy with their relationships, properties, attributes and relationships. The credit risk of the bank - a formalized process with a clear sequence of phases, mechanisms and methods by which the bank identifies risks, assesses their level. Monitor and control its risk positions. Management Credit risk is the carrying out actions aimed at maintaining a risk level that meets stated objectives of the bank.
decreased in profitability banking sector
in the course of their activities. Its appearance is caused, first of all, delayed detection of problem loans and the lack of established under these provisions, and the imperfection of credit control in banks. Increasing interest in the assessment of the credit risk associated with an increase the loan portfolio of banks decreased in profitability banking sector, prompting banks to take on high credit risks. All this has caused and the urgency of improving existing introduction of new techniques and assessments of credit risk. The main areas of regulation of credit risk is the development and implementation of measures to prevent or minimize the associated losses. Minimizing credit risk involves complex measures to reduce the probability of occurrence of events or circumstances that lead to credit losses and (or) a decrease (Limitations) of the potential credit losses. The Bank manages credit risk at the level of individual loans and on levels of credit portfolio as a whole. The source of individual credit risk is a separate specific counterparty bank - borrower, debtor, issuer of securities. Evaluation of individual credit risk assessment involves individual counterparty creditworthiness, ie, the unique ability to timely and fully pay for accepted obligations. The results of assessing the creditworthiness of the customer are the Based on the decision to grant or loan. Based on creditworthiness of the borrower's bank determines that the amount of risk it can take over. After giving workers credit loan unit should be in constant contact with the borrower with to monitor compliance with the terms of credit. Control of credit operation allows time to detect changes in the financial and legal status client and react to changing quality of the loan. The credit risk in lending is made through: - Modifying the terms of the loan agreement; - After termination (restriction) loans; - Controlling the movement of funds in the accounts of the borrower bank debit funds from the borrower; - Setting the term loan and more. Portfolio credit risk - a measure (degree) riskiness of credit portfolio (the aggregate of all credit transactions) commercial bank. He shown to reduce the value of bank assets. The source of portfolio Credit risk is the total debt to the bank for transactions which is exposed to credit risk (loan portfolio, portfolio of securities securities portfolio of receivables, etc.). The credit risk of the bank consists of the following steps: - Assessment of credit risk; - Monitoring of credit risk; - Control of credit risk; - Minimizing risk. Overall credit risk management can be seen as a set of measures to minimize costs in order to establish optimum ratio of return and risk. The purpose of this activity |
the urgency of improving
in the course of their activities. Its appearance is caused, first of all, delayed detection of problem loans and the lack of established under these provisions, and the imperfection of credit control in banks. Increasing interest in the assessment of the credit risk associated with an increase the loan portfolio of banks decreased in profitability banking sector, prompting banks to take on high credit risks. All this has caused and the urgency of improving existing introduction of new techniques and assessments of credit risk. The main areas of regulation of credit risk is the development and implementation of measures to prevent or minimize the associated losses. Minimizing credit risk involves complex measures to reduce the probability of occurrence of events or circumstances that lead to credit losses and (or) a decrease (Limitations) of the potential credit losses.
The basis of modern banking is to optimize
Strict and consistent adherence to these stages will allow more carefully monitor the credit process and, consequently, provide quality of the loan portfolio and, consequently, the effectiveness of banking institution as a whole [64]. 1.3 The system of credit risk management of commercial bank The basis of modern banking is to optimize the parameters risks causing the need for an integrated approach to the creation of management. Optimization methods and technology risk management in banks was one of the main prerequisites for gaining competitive advantage, attracting customers and increase the profitability of the banking business [54]. Credit risk - the main financial risks faced by banks in the process of their work. Its appearance is caused, first of all,
been engaged with the client after receiving his loan
In the loan agreement provided as is usually some force majeure circumstances that give guarantee banks and customers in the event of losses due to circumstances beyond their control. At the fifth stage, the bank has been engaged with the client after receiving his loan. This work provides for enforcement loan agreement and the search for new forms of cooperation with the client. In the case of deterioration of the financial situation of the client and the risk of default loan loan officer makes note of guidance to could take appropriate action. Sixth stage - the repayment of interest and closing credit case - the final stage of the bank lending relationships with borrower. Cases outstanding loans should be reviewed annually (More cases to be considered outstanding NPLs) at that all information should be adjusted. The latter involves analytical assessment of the borrower and lending services, calculation, compliance with loan agreements, etc.
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