The risk of diversification is a basic precept of the banking activity. A big part of the large banking failures was due, in a way or another, to a concentration of the credit risk. The banking controlling authorities have, at all times, strongly encouraged the banks placed under their jurisdiction to avoid the concentration of risks. This concentration can take several forms. Apart from the credit risk, it can comprise an over-exposure to the market risks or an excessive financing risk when a bank calls too exclusively upon a given compartment of the market to get resources. Certain forms of risk concentration do not lend themselves easily to an objective measurement, in spite of their considerable importance for the monitoring of such or such bank. Moreover, the fact that the banks are often specialized in a particular field can mean that the profitability of this type of activity is above the average, although the risk which they incur is also higher than the average if the external factors seem less favorable.
[...] FIRST PART: Management of the credit risk and the control of its impact on the profitability of the financial institutions Introduction of the first part The challenges of the banking environment depend on the evolution of the risks and the need to adapt oneself so as to have a competitive positioning. To understand these various challenges, I concentrated initially on what the banking environment is today. The bank has become a changing reality, among which its limits and its large features are sometimes difficult to determine exactly. [...]
[...] Section Control of the credit risk in the bank Paragraph Management of a credit portfolio The credits portfolio and the provisions for doubtful debts which are associated to it are the most important stations of the financial statements of a finance company. The credit portfolio generally constitutes the essential asset of the establishment. The portfolio and the provisions are the stations most likely to comprise significant anomalies. The portfolio is the independent source of risks exploitation for a finance company. [...]
[...] The credit risk cannot be completely appreciated apart from the commercial context. New data adds to the equation: the convergence of the credit and market risks. In many fields, like the structured products, the border between these two risks is becoming increasingly less defined. With the complexification of the products, operational approach of the market risks is as essential as in the credit risks. If the credit and market risks are under high control, the operational risk should not be underestimated. [...]
[...] Chapter the Basel II stakes for the Moroccan banks Section prospects of the Basel II agreement Paragraph Project of the risk management One of the principal projects of risk management of the Banque Populaire was the study and the preparation of the implementation of Basel II. From the point of view of aligning with the international dispositions with regards to risk management, the bank urged a setting in conformity with the future regulation on capital adequacy. In this way, the pole of Total Management of Risks is the entity of the bank which covers the headlight project of the installation of risk management system in conformity with the Basel requirements. [...]
[...] The banking management of the credit risk As regards banking management, one generally distinguishes the “macro management” from “micro management” of the credit risk. The macro management of the credit risk is where the resort to the derived products of credit allows diversifying the banking portfolios without spoiling the commercial relations which can exist between these establishments and their customers. The micro management of credit risk is where the derivative products of credit offer protection against the default risk or widening of the margin of credit of individual debtors. [...]
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