Credit risk management: a survey of practices

Fatemi, Ali M; Fooladi, Iraj

doi:10.1108/03074350610646735

Cited by 50 publications

(40 citation statements)

References 17 publications

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“…In the USA a minority of banks used, or planned to use, in-house models of credit risk management. 47 Most senior managers of Nigerian banks were not fully prepared to manage liquidity risk exposure and were not conversant with common methods of measuring and managing a bank's liquidity exposure. 48 Spanish saving banks lacked good knowledge of the operational risk requirements of the Basel II Accord; lacked an efficient organisational structure through which to implement an advanced operational risk information system; and had information systems that were incapable of responding to Basel II requirements.…”

Section: Literature Reviewmentioning

confidence: 99%

Risk-related disclosure practices in the annual reports of Portuguese credit institutions: An exploratory study

2011

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Section: Literature Reviewmentioning

confidence: 99%

Risk-related disclosure practices in the annual reports of Portuguese credit institutions: An exploratory study

2011

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“…These studies include Fatemi and Faloodi (2006) who carried out a qualitative investigation of large US based financial institutions to determine the extent of banks engagement in credit risk management practices and their utilization of house generated models or vendor marketed models. They found out that only a minority utilize any of the models.…”

Section: Literature Reviewmentioning

confidence: 99%

The Effect of Credit Risk Management on Banks’ Profitability in Kosovo

2016

European Journal of Economic Studies

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The concept of the credit risk management has gained momentum in recent years with financial institutions developing techniques aiming at minimizing credit risk and regulatory bodies coming up with policies ensuring banks adequately manage their risks.This study was carried out to quantitatively determine how risk management affects the banks profitability. PCB, RBKO, NLB, TEB were selected as the sample banks for this study. The methodology involved extracting time series data from the annual reports of the banks to calculate the return on equity which was used as a measure of profitability and also to calculate the nonperforming loan ratio which was used as a credit risk management measure along with the risk asset ratio. Return on equity was expressed as a function of the risk asset ratio and non-performing loan ratio and substituted into a multivariate regression model. The data was run using SPSS software. To further examine the relation a simple linear regression was carried out along with a trend analysis. The output showed a substantial relation between the variables and reflected that a higher risk asset ratio would result in a marginal decline in profitability while higher nonperforming loans had a positive and more substantial effect. Further analysis showed a predominantly negative effect, highlighting the possible inadequacy of the multivariate model.

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“…− Credit risk; − Market risk; − Liquidity risk; − Operational risk. In credit risk, borrowers face uncertainty that exists in the possibility of failing to meet the obligations that have been agreed upon with the bank (Fatemi & Fooladi, 2006). For most banks, this is the main source of risk.…”

Section: Risk Management By Financial Institutionsmentioning

confidence: 99%

Enterprise Risk Management in Kosovo’s Banking Sector

Sahiti

Aliu

2017

Baltic Journal of Real Estate Economics and Construction Management

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Abstract. Today risk management plays a vital role in business. Each firm, whether big or small, makes an effort to manage risk more effectively. Risk management is very important in the financial system, especially in banks. Billions of Euros are spent each year on the financial reporting of banks. Banks should implement effective solutions in risk management to mitigate their risks. Great financial debate that originated in the 1990s is reportedly linked to errors that occurred in the banking sector due to poor risk management. It should be noted that today technology plays a key role in risk management and it has already had a positive effect on the financial industry. Analysis of risk and its management has become significant in the Kosovo economy since the post-war period. The nature of the banking business is threatened by risks because more financial products are becoming complicated. The main role of banks is intermediation between those who have resources and those seeking them. Banks face various risks at the corporate level, such as operational, liquidity, legal, credit, and market risks; thus, these risks should be converted into a composite measure. This research aims to determine practices and effects of risk management in the banking sector. Relevant data were collected from banks through questionnaires and telephone interviews; analysis has been conducted using statistical tools. This study will engage both the quantitative and qualitative methods of data analysis. Dependent variables will be separated from independent variables, and regression analysis will be used to analyse the quantitative data.

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Credit risk management: a survey of practices

Cited by 50 publications

References 17 publications

Risk-related disclosure practices in the annual reports of Portuguese credit institutions: An exploratory study

Risk-related disclosure practices in the annual reports of Portuguese credit institutions: An exploratory study

The Effect of Credit Risk Management on Banks’ Profitability in Kosovo

Enterprise Risk Management in Kosovo’s Banking Sector

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