Comparison of Different Methods of Credit Risk Management of the Commercial Bank to Accelerate Lending Activities for SME Segment

Eva Cipovova and Gabriela Dlaskova

European Research Studies Journal, 2016, vol. XIX, issue 4, 17-26

Abstract: The contribution is dealing with selected assessments of the most important risk in the banking sector in the Czech Republic. The aim of this article was to quantify capital requirement for individual methodologies of credit risk management on the designed portfolio with corporate loans with use of collateral using collaterals as techniques to reduce credit risk of commercial bank. Firstly, the aim of this article is to quantify the capital requirements using the Internal Rating Based Approach with collateral usage. Afterwards, achieved results have been compared with the methodology of the Standardized Approach and Internal Based Approach. The article is highlighted aspects of transition to developed methods of Internal Rating Systems with significant savings on equity, which allows banks accelerate lending activities and so increase provided services for small-medium sized companies.

Keywords: Standardized Based Approach; Foundation Internal Rating Based Approach; Probability of default; credit risk management (search for similar items in EconPapers)
JEL-codes: G18 G22 G32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xix:y:2016:i:4:p:17-26

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