Credit risk management system in commercial banking

Abstract

Banking operations are increasingly exposed to credit risk, which indicates the failure of the banks to settle their claims based on previously approved loans.Credit risk may lead to the closure of banking operations, ie. execution of certain transactions. This paper will analyze three particular areas: modern methods of credit risk management in banks, methods of measurement and assessment of credit risk and credit risk analysis of a specific example. When it comes to modern ways of credit risk management in banks, will point to diversification of loan portfolios, the basic aspects of credit risk management the section on methods for measuring and evaluating credit risk, contain two basic approaches: the standardized approach and internal rating approach by the bank. Show the bank's exposure to credit risk in categories 1-5. Shall review the entire asset impairment view by category, analyze the concentration risk as a special type of credit risk, both by geographical regions and groups of clients.

Keywords

• credit
• credit risk
• risk management
• risk measurement
• balance sheet assets