Trade Credit Risk Management: The Role of Executive Risk-Taking Incentives

2015 ◽  
Vol 42 (9-10) ◽  
pp. 1188-1215 ◽  
Author(s):  
Anna Elsilä
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Risk Taking ◽  
Trade Credit ◽  
Credit Risk Management

scholarly journals The Evaluation of Trade Credit Insurance in Lithuanian Business Market as a Credit Risk Management Tool

2017 ◽  
Vol 14 (1) ◽  
pp. 5-20 ◽  
Author(s):  
Aleksandra Lezgovko ◽  
Andrej Jakovlev
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Credit Risk ◽  
Trade Credit ◽  
Alternative Methods ◽  
Management Tool ◽  
Credit Risk Management ◽  
Management Tools ◽  
Credit Insurance ◽  
Business Market

AbstractIn today’s trade, the vast majority of commercial transactions in both domestic and international trade are concluded by applying trade credit terms. The aim of this article is to analyse the trade credit insurance and, according to the methodology, to evaluate it as a credit risk management tool in the context of Lithuanian business market. The authors have proposed a methodology that combines theoretical and practical research methods. First of all, with assistance of qualitative analysis, the alternative external credit risk management tools were examined. Such analysis allows not only to identify the advantages, disadvantages and benefits of researched risk management tools but also to assess the efficiency and rationality of trade credit insurance in the context of alternative methods. In order to carry out an assessment in the practical aspect, considering the lack of statistical data, it was decided additionally to perform an expert evaluation. After performing an assessment of trade credit insurance, it was concluded that in international trade, with a large buyer portfolio and high sales volume, the trade credit insurance becomes the most effective and rational way to manage credit risk, which eliminates the losses because of the debtor’s insolvency or bankruptcy, manages countries and sector’s risks and helps to discipline the debtor, what determines the decline in overdue accounts frequencies, amounts and volumes.

scholarly journals Insurance as a loan agreement for managing risk in corporate lending

2021 ◽  
Vol 9 (1) ◽  
pp. 84-93
Author(s):  
Marija Đekić ◽  
Vladimir Ristanović
Keyword(s):  
Risk Management ◽  
Developing Countries ◽  
Credit Risk ◽  
Significant Role ◽  
Credit Risk Management ◽  
Methods And Techniques ◽  
The Subject ◽  
Managing Risk ◽  
Banking Operations

Credit risk management is one of the most important banking operations, both in developed and developing countries. In addition to numerous methods and techniques, banks decide to conclude special credit agreements when granting loans to economic entities. The special provisions of such an agreement provide additional assurance to the lender that it will not incur losses when borrowing funds. In these loan agreements, insurance plays a significant role, whether it is corporate or bank borrowing. In this paper, the subject of consideration is the role of insurance as a loan agreement in corporate lending primarily by banks. The aim of this paper is to describe the importance and role of insurance in the process of corporate lending, point out the benefits of the existence of provisions related to insurance in the loan agreement for both lender and borrower, and provide a brief overview of the use of insurance as a method of credit risk management, referring to the use of this type of agreement in Serbia as well.

scholarly journals Human capital and credit risk management: training is more valuable than experience

2019 ◽  
Vol 17 (1) ◽  
pp. 67-77
Author(s):  
Ghassen Bouslama ◽  
Christophe Bouteiller
Keyword(s):  
Risk Management ◽  
Human Capital ◽  
Credit Risk ◽  
Default Risk ◽  
Management Training ◽  
Credit Risk Management ◽  
Risk Monitoring ◽  
Loan Officer ◽  
Loan Officers

The aim of this article is to assess how human capital, and more specifically training and experience, helps in forecasting and monitoring credit risk. It uses a survey of a sample of loan officers in a major French mutualist bank and applies analysis of variance and correlation to determine the relationships among variables. The study of these two components of human capital in SME loan officers shows that their ability to anticipate risk depends above all on their training rather than on their experience. Some methods of anticipating risk are more important than others. Loan officers monitor their clients in similar ways, whatever the degree and nature of their experience. The findings have two important implications for credit risk management and human capital: first, both technical and regulatory training is crucial to enable loan officers to anticipate bank credit risk, second, experience, whether in banking or as a loan officer, only makes a difference in monitoring risk. These results will be useful when banks are planning recruitment, career management and resource and skills allocation. They also suggest that staff knowledge management will enable banks to use their human capital effectively to reach their own objectives with regard to risk control, and those fixed by the regulators. This work is, as far as it is known, the first to study the role of human capital in managing credit risk. The authors show that training is more important than experience in default risk anticipation, but that experience is useful in risk monitoring.

Credit Risk Management of Kumari Bank Ltd. Nepal

2018 ◽  
Vol 7 (4) ◽  
pp. 14
Author(s):  
Kalpana Sahani ◽  
Soni Sahani ◽  
Sundip Bansal ◽  
Deepak Shakya ◽  
Binay Shrestha
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Risk Taking ◽  
Management Systems ◽  
Primary Concern ◽  
Credit Risk Management ◽  
Foreign Exchange Risk ◽  
Exchange Risk ◽  
Negative Effect ◽  
Recent Financial Crisis

Banks are always faced with different types of risks that may have a potentially negative effect on their business. Risk-taking is an inherent element of banking and, indeed, profits are in part the reward for successful risk taking in business. On the other hand, excessive and poorly managed risk can lead to losses and thus endanger the safety of a bank's depositors. Risks are considered warranted when they are understandable, measurable, controllable and within a bank’s capacity to readily withstand adverse results. Sound risk management systems enable managers of banks to take risks knowingly, reduce risks where appropriate and strive to prepare for a future, which by its nature cannot be predicted.Financial institutions are subject to a number of risks such as Credit risk, Market risk management, Foreign exchange risk, Operational risk, and Liquidity risk. Although credit risk has always been of primary concern to these institutions, its importance became paramount during the recent financial crisis. The crisis exposed the shortcomings of existing risk management systems, and several firms saw significant losses resulting from failure of their counterparties to deliver on contracts. Firms may also be worried about a second recession, which makes credit risk a top priority.

scholarly journals The Role of the Credit Risks Management in Commercial Banks

2020 ◽  
Vol 6 (6) ◽  
pp. 225-229
Author(s):  
M. Kenjaev
Keyword(s):  
Risk Management ◽  
Monetary Policy ◽  
Credit Risk ◽  
Commercial Banks ◽  
Best Practice ◽  
Credit Risk Management ◽  
Credit Risks ◽  
The Republic

The article discusses issues related to improving credit risk management in the activities of commercial banks of the Republic of Uzbekistan, as well as developed scientific proposals aimed at solving these problems. Studied further ways to improve monetary policy using the tools used in international best practice in the strategy of the President of the Republic of Uzbekistan.

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