Improvement of the Internal Control System of Credit Risk in Banking Sector of the Republic of Moldova in Conditions of the COVID-19 Pandemic

Abstract

The internal control system of credit risk in the banking sector of the Republic of Moldova is currently jeopardized by the effects of COVID-19 pandemic. The COVID-19 crisis has triggered five major challenges to the credit risk environment: changes in the credit worthiness at the sector and subsector level, difficulty in differentiating between borrowers in the same sector/subsector, scare, lagging data on crisis conditions, socially responsible collections needed to meet changing customer preferences, large wave of non-performing loans which must be addressed in a new way. Consequently, banking institutions are forced to identify new solutions in fostering the efficiency of internal control systems.

Keywords

• internal control system
• credit risk
• covid–19
• impact
• banking sector
• improvement
• consolidation
• audit