Credit Risk Management in Financial Crisis
Credit Risk Management in Financial Crisis

Summary/Abstract: The concept of risk can be defined as an undertaking that bears uncertainty due to the probability of winning or loosing. Currently, the risks have become related to all activities, services and banking products and many risks generate different approaches of this notion. The risks a bank is subject to should be treated as a complex of uncertainties, often interrelated, because they may have common causes. The banking risk is expressing the probability of occurrence of events that may have positive or negative influence on the bank. Managers of financial institutions are aware of the fact that profit maximization involves constant exposure to risk. In this context, risks management is an important component of bank management as well as the strategy of a bank. In the current context of crisis, access to any resource, including the financial, is more difficult, and more expensive. Therefore, the eligibility of any customer of the bank is carefully assessed and determining the risk profile and a proper management of credit risk is absolutely necessary. Most valuable capital for a bank is trust: customers must prove that the borrowed money are efficiently used, and will be returned at maturity of the contract.

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