Indicative FSP

Credit Risk Monitoring Study

Credit risk can be defined as the loss associated with unexpected changes in credit quality. Despite many innovations in banking, credit risk is typically the most significant source of risk. Credit risk monitoring involves credit risk transparency, defined credit decision process, sophisticated risk measurement methodologies, stress testing, timeliness and accuracy of risk calculations as well as efficient credit risk reporting. This project aimed at preparing a report for credit risk monitoring. The purpose of the study is to analyze the adequacy of the organization, processes and tools, related to the identification, information, alert and management of credit risks consecutives to the amortization of credits granted and/or internal and interbanking payments. As a general rule, the perimeter is limited by: a) the credit granting decision as starting point (the relevancy of decisions made at this stage is out of the scope), b) the transfer of the credit, client’s credits to another entity than the commercial in charge of recoveries. This study is expected to highlight weaknesses in the organization in place but also, moreover, to propose for each of them concrete and feasible improvements.

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