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MANAGING INFORMATION ASYMMETRY AND CREDIT RISK – A THEORETICAL PERSPECTIVE

Ali Tfaily

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2017, vol. 11, issue 1, 652-659

Abstract: Banking risk is a phenomenon present in the entire sphere of activity of banking companies and represents the uncertainty of achieving a certain level of profit or even the likelihood of a loss. Banking risk is generated by a multitude of operations and procedures, with the financial field requiring the approach as a complex of risks, often interdependent, which may have common causes or may cause other risks in the chain. It is constantly changing and evolving in complexity, besides traditional risks, adding today financial risks, operational risks, strategic risks, country risks, human risks, fraud risks. The aim of this research is to present some of the current concerns regarding the concepts of information asymmetry and credit risk analysis, performing an in-depth analysis of the field from three perspectives: information problems between the bank and the borrowers, solving information problems, bank's activism towards information asymmetry and presenting the most relevant findings related to the analyzed aspects. The methodology of the paper consists of literature review.

Keywords: information asymmetry; credit risk; bank risk management; adverse selection; moral risk (search for similar items in EconPapers)
Date: 2017
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