Credit Risks in Banking of the Countries in Transitional Phase and possible Ways of Their Reduction in Croatian Banking System

Stjepanek, Stjepan and Matić, Branko (1999): Credit Risks in Banking of the Countries in Transitional Phase and possible Ways of Their Reduction in Croatian Banking System. Published in: The first Pan European symposium, European spring in CBH triangle (1999): pp. 241-248.

Abstract

Practically, there is no human activity without being connected with some form of risk. A complexity of the activity is in a close connection with the risk level and, as a rule, the greater complexity leads to a greater risk. The importance of risk is stressed to a large extent in some sectors, such as financial institutions, especially banks. Risk is not a unique category. The most represented type of risk in credit is a credit risk. It is possible to divide factors of risk emergence and defining, their reduction and control, into following: organizational, cognitive, and technical. A time gap between decision-making and investment influences the size of a credit risk. The length of credit structure influences the risk. The cognition of debtor's debt servicing potential, methods of coverage credit risk and indicators of credit risk growth are prime movers in risk management. The optimization of risk has its positive effect on the total economic efficiency, prevents negative allocation of resources into marginal and unprofitable programs. At the same time, the credit risk size depends on total macroeconomic moves and institutional conditions. Internationalization of financial and credit courses, as a general tendency, especially influences countries in transition.

• Item Type: MPRA Paper
• Language: English
• Keywords: Credit, credit risk, credit rating, transition, banking, macroeconomic stability, institutionalization, internationalization
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; G - Financial Economics > G2 - Financial Institutions and Services; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill

References

V. Leko, N. Mates: Dictionary of banking and financing, Masmedia; Zagreb,1993

E.I.AItman: Manafing Commercial Lending Proces Aspinwall/Eisenbeis, 1985

Ivanovic, Financing management, Faculty of Hotel Management in Opatija, 1977

J.R. Franks/J.E. Broyles, Modern Menagment finance, 1979

Reed, E.W./Cotter and other: Commercial Banking, Prentice-Hall, N.Jersey, 1976

M.A. Pitcher: Management counting for the lending banker, The Institute of Banker, London, 1973

Sermon C: Credit risk in the system of balance risk management,International conference on banking,Opatija, 1996

Jakovcic D.: Management of assets and liabilitiesin the function of credit risk control, International conference on banking, Opatija, 1996

Tarle I.: Systematic credit policy, The first international conference on banking, Opatija, 1996

OECD, Economic Surveys, United States, Paris 1988

Classification of the clients according to their risk level Srb V., Markovic B.: Monetary and Credit Policy, Faculty of Economis in Osijek, Osijek, 1999

Srb V.: Public and Social Finances, Faculty of Economics in Osijek, Osijek, 1990

Srb V., and others: Direct Taxation, Faculty of Law in Osijek, Osijek, 1994

Srb V, Matic B.: Numismatics in the Croatian Heritage and Economy, Croatian Banking Institute, Zagreb, 1997

Galbraith J.K.: Money, Reality, Zagreb, 1970

Shumpeter J.: History of Economic Analysis, New York, 1954

Miller R., VanHoose D.D., Modern Money and Banking, Third Edition, MATE, Zagreb, 1993

Perisin I., Sokman A.: Monetary and Credit Policy, Informator, Zagreb, 1992

Veselica V. : Finanical System in Economy, Engineer Office, Zagreb, 1995