Project Lending in Banking Risk Management

Yury Yuryevich Rusanov, Natalia Nikolaevna Natocheeva, Tatiana Viktorovna Belyanchikova and Gulmira Bektenova

European Research Studies Journal, 2017, vol. XX, issue 4B, 453-471

Abstract: The article presents a number of concepts of contemporary risk management theory and methodology. The general concept of risk is structured into two successive aspects: factorial and productive. Except of the broadest approach to the definition of risk as having in its manifestation only negative consequences (losses), i.e. "pure risk", the authors define also "odds", "chance risks (speculative risks)", and "shocks". It is shown that in project lending (funding), credit, reputational, and deposit pure banking risks can be significantly reduced, while corresponding odds can increase. This is due to the fact that cash flow management of the project is carried out by bank employees or working groups under their leadership, whose competence and professional behavior will support the bank's reputation and will allow immediately and timely providing a return of funds invested in the project. The authors describe techniques and tools to minimize and compensate banking risks, as well as peculiarities of their application in project lending (funding).

Keywords: commercial bank; project funding; factorial risk area; risk management; methods and tools for preliminary orientation; reputational risk; project author and implementer. JEL Classification: G21; G24; G32. (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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