Credit risk management in a Russian banking system

The current situation of the financial sector clearly shows us that the ways of predicting the future losses, along with their monitoring and management, are rather underdeveloped or being taken as separate mathematical models, thus using only quantitative analysis without the qualitative one. The role of the risk-management system cannot be underestimated, especially after (and during) the world economy crisis. The current problem of the Russian risk-management system is the low power given to the risk-management personnel. That¿s why one of the key points to the better risk evaluation is the possibility of the risk-management department to report directly to the board of directors, not to the management of the bank, as it is the shareholders¿ money to lose. The goal is to find the proper balance between the risk and the profit while presenting the transparency of the business. It should be done in a clear way, better an algorythm, which can be applied in many organisations by the starting employees. This book presents a sample of such an algorythm.