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Effective risk management in financial services |
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Credit Risk
Tags :
Credit risk, Financial institutions, financial risk management, risk management, financial risk, banking, operational risk, credit risk, risk mitigation, financial risk manager, financial risk analysis, bank
Industry :
Banking, Asset Management
Functional Area : Business Processes, Capital Management |
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About "Credit Risk" topic:
The requirements of Basel II and Solvency II have increased the focus on credit risk measurement and management and its contribution to economic capital. Continuing innovations in risk mitigation techniques through securitizations, collateral management, and credit protection have created opportunities for institutions to manage their exposures proactively. Share your thoughts on credit risk strategy and governance, meet regulatory requirements, define and validate models and methodologies, optimize risk-technology infrastructure, refine internal and external reporting, and assist in determining economic capital and overall capital management strategies.
2 trends
, 4 insight
, 2 debates
, 7 idea contests
on topic: "Credit Risk"
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Credit risk management is a very important area for for the banking sector and there are wide prospects of growth and other financial institutions also face problems which are financial in nature. Also, banking professionals have to maintain a balance between the risks and the returns.For a large customer base banks need to have a variety of loan products.If bank lowers the interest rates for the loans it offers, it will suffer In terms of equity, a bank must have substantial amount of capital on its reserve, but not too much that it misses the investment revenue, and not too little that it leads itself to financial instability and to the risk of regulatory non-compliance. Credit risk manag...
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Elizabeth
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| 4 days ago
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Online shopping facility that RightShopping.in provides is really a welcome boost for the shoppers. Not just because all the leading brands are under the single roof, but also because the shopping facility in the form of discounts, price leverage,...
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geetanjali
| Commented
| 1 year ago
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well, banking is all about financil risk and rewards, the banks need of have various products for their customers for various financial needs. as far as loans are considered, u are right, banks need to have a number of products, the interest rates...
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Nishchal Khetarpal
| Commented
| 3 years ago
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Please put only IT related articles here.
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Trends: "The Importance of Credit Risk Management for Banking" deleted from your view.
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Consider a square with it’s left and bottom sides representing A and the top and right sides for B. The bottom and the left sides represent X1 and X2 goods or services for A and the right and top sides again representing X1 and X2 goods and services for B Draw two monotone function one concave upwards and one convex downwards. The point where they meet draw the tangent which is tangential to both the curves. The diagonal from bottom left to top right corner is called the ‘budget line’ and the tangent drawn earlier is called the ‘contract curve. The curves are called the ‘indifference curve’ for both A and B respectively. A contract between A and B is efficiently done at the point where the...
Insight: " Why contract laws a requirement for Risk management to work !" deleted from your view.
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In India there is widespread complaint among Journalistic community that Economic theories have failed and Keynsian transmitters have failed. Modern Risk management theories are a failure they assert. When one analyses their complaint we see that their fear is unfounded that all over the world including USA they flouted many of the Keynsian directives and so turmoil resulted. In America they tampered with the Endowments of the people by successive Presidents and in India we don’t care about endowing the populace beyond Gandhian prerogatives ie; Village life. Indian economy need to be designed to deliver ‘contingent claim ’ functionality. Why risk models cannot be incorporated into th...
Insight: "Wy Risk management will take more time to reach Indian shores." deleted from your view.
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Yes
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No
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Hitesh Moghe
| Argues in support of
"Yes"
| 3 years ago
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I think it is correct to insure it at least there would be a back up in that case.
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Debate: "Credit risk insurance" deleted from your view.
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1
Purchase insured CDs
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Reduce risk of prorata distribution
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Vikram Kashyap
| Added idea
"Reduce risk of prorata distribution"
| 3 years ago
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Due to the asset registration the trustee of SIP's return customer name assets to their owners prior to prior to pro rata distribution process. This actually gives safety to customers because their name has been withdrawn initially.
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Prateek Kacker
| Added idea
"Purchase insured CDs"
| 3 years ago
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One option could be of purchasing insured CDs directly from the issuing institution. The CD will have applicable FDIC deposit insurance. This strategy may, however, result in some reduction in yield relative to brokered CDs.
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Ideate: "Reduction of Custodial risk" deleted from your view.
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Type of Credit
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Track record
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Santosh Bhosle
| Added idea
"Type of Credit"
| 3 years ago
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Length and track record of your credit do matter but the type of credit you have also determines your credit score, if a customer has a mix of revolving credit, installment credit, credit card, car loan will have an higher rating.
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Varun Sood
| Added idea
"Track record"
| 3 years ago
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I feel track record has the most significant impact on your score is whether you have paid past accounts on or before the date the payment was due.
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Ideate: "What factors can affect your personal credit rating?" deleted from your view.
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Banks and other lending institutions must constantly balance risks and rewards. Too high a price on loan products, and you lose the customer; too low, and you starve the profit margin or take a loss. Too much capital on reserve, and you miss investment revenue; too little, and you risk regulatory noncompliance and financial instability. When every department, line of business and region measures and reports risks differently – with disparate risk management systems – it can be difficult to accurately gauge overall risk exposure and strike the right balance. In ICICI Bank this department is managed and taken care by Credit Risk Compliance Audit Department (CRC AD). It evaluates risk at the...
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gretel
| Commented
| 2 months ago
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hello sir, this is gretel.i am doing a project on credit risk management.i wud be highly oblige if you could do me the favour & help me understand a little more.kindly pls do revert to me regrading this. my email id is arwengretel24@gmailcom...
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Alok
| Commented
| 2 years ago
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Actully Risk occure due to mismanagement of monitoring data.Today when everything is available once should check the credit ranking & other aspect at sharp.A company has many reliabilities so it very important to ha
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Insight: "Credit Risk Management by ICICI Bank" deleted from your view.
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1
Reduced form approach
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The structural approach
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Karthikeyan P S
| Added idea
"Reduced form approach"
| 3 years ago
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The reduced form approach multiplies the states of the world, beyond the usual ones with interest rate derivatives, to include states where the debtor defaults. The risk neutral probability of default and the recovery rate in default are...
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Sudhir Shirke
| Added idea
"The structural approach "
| 3 years ago
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One approach is the structural approach to credit default looks at a credit risky bond or swap as a credit risk less bond or swap, minus an option to exchange the bond or swap for the debtor's portfolio in bankruptcy. The approach is on sound...
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Ideate: "Pricing credit risk" deleted from your view.
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The issues related to Credit Risk are addressed in the Policies stated below; 1)Loan Policy. 2)Credit Monitoring Policy. 3)Real Estate Policy. 4)Credit Risk Management Policy. 5)Collateral Risk Management Policy. 6)Recovery Policy. 7)Treasury Policy. Bank carried out a comprehensive Self-Assessment exercise spanning all the risk areas and evolved a road map to move towards implementation of Basel II as per RBI’s directions. The program in implementation of Risk Management, Organizational Structure, Risk measures, risk data compilation and reporting etc. is as per this laid down road map. The Polices framed and procedures / practices adopted are benchmarked to the best in the industry on a c...
Insight: "Credit Risk Management " deleted from your view.
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Here are some principles given for the management of credit risk . 1. While financial institutions have faced difficulties over the years for a multitude of reasons, the major cause of serious banking problems continues to be directly related to lax credit standards for borrowers and counterparties, poor portfolio risk management, or a lack of attention to changes in economic or other circumstances that can lead to a deterioration in the credit standing of a bank's counterparties. This experience is common in both G-10 and non-G-10 countries. 2. Credit risk is most simply defined as the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agr...
Trends: "Priniciples for managing credit risk " deleted from your view.
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