Management of any dynamically developingThe credit organization should strive to ensure that the value of the bank approaches the maximum, i.е. that the bank would make a profit at a certain level of risk. In turn, the management of banking risks is a complex process, including the management of cash flows, continuous monitoring of the probability of occurrence of the risk of loss and its prevention through effective organization of work, the selection of qualified personnel for ordinary and managerial positions, the introduction of automated processes.
Banking risks are divided into several main groups:
1. Financial risks, including market and currency, liquidity risk, interest and credit risk, capital adequacy risk, balance sheet structure risks, financial reporting.
2. Business risks, including the risks of financial infrastructure, legal, market.
3. Risks of emergencies, among which are political, the risks of the banking crisis in the country where the bank is located, and also abroad.
4. Operational risks, including fraudulent actions of personnel or customers, risks of technological failures, the chosen strategy and internal system of the credit organization.
The most difficult to manage are the risksemergency situations, because they often arise spontaneously and can not be foreseen, especially if some of the bank's assets are located in another country. For example, a ban on operations with deposits in another country nullifies the management of cash flows that should have been received by a particular bank. Other risks can and should be minimized for successful work.
Due to the fact that the main operations of the banksuch as the accumulation of funds and their provision in the form of loans, then a significant share in the banking risks is borrowed. It includes the probability that the borrower will not repay the debt in full, return only part of it or carry out a refund operation with a violation of the deadlines.
Among credit, the risks frombad faith of private clients, non-return by corporate clients, as well as the risks that a state will lose the ability to pay its obligations (sovereign).
Credit risk management implies:
- management of the bank's loan portfolio, the principles of which are reflected in the relevant policy in the form of a plan for the allocation of credit resources, etc .;
- performance of credit function (loans should return, bring profit and be in demand on the market);
- constant monitoring of the quality of the loan portfolio;
- allocation of non-performing loans and development of measures for their return;
- reduction of credit risks due to minimization of excessively large loans to one or another person, region or even country, creation of a reservation system for possible losses, etc.
In addition to ensuring the repayment of loans, the bank mustto attract money to deposits, because at the expense of its own funds, only a small share of loans is made. In order to efficiently manage cash flows, it is necessary to analyze the general economic trends and proposals of competitors to establish a deposit rate attractive to customers, have a good reputation to borrow money on the interbank market, meet the regulatory authorities requirements for issuing own securities, funds, for example, in the stock or currency market, etc.
Management of cash flows of the bank isa complex process, the end result of which should be the optimal balance structure, ensuring profit at the required level of risk and compliance with existing regulations and laws.