International Practices of Credit Risk Assessment and Management in Banking Systems
Keywords:
Credit risk, risk assessment, risk management, banking system, credit scoring, Basel regulations, financial stability, risk modeling, loan portfolio, banking supervision, non-performing loans (NPLs), regulatory framework, international banking practicesAbstract
This article examines international practices of credit risk assessment and management within modern banking systems. It explores the key methodologies, tools, and regulatory frameworks used by banks across different countries to identify, measure, and mitigate credit risk. The study highlights the role of credit scoring models, risk rating systems, and advanced analytics in improving decision-making processes. Additionally, it analyzes the impact of global standards, such as Basel regulations, on strengthening risk management practices and ensuring financial stability. The paper also compares approaches adopted by developed and developing banking sectors, identifying best practices and existing challenges. The findings emphasize the importance of integrating technology, maintaining strong regulatory compliance, and implementing effective risk governance to enhance the resilience and sustainability of banking institutions.
References
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[12] European Banking Authority, Guidelines on Credit Risk Management Practices. London, 2019.
[13] Federal Reserve System, Supervisory Guidance on Credit Risk Assessment. Washington, DC, 2021.
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[15] S. Crouhy, D. Galai, and R. Mark, The Essentials of Risk Management. McGraw-Hill, 2014.
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