Credit Risk Management in Finance : a Review of Various Approaches

Aleksandra Wójcicka-Wójtowicz

Abstract

Classification of customers of banks and financial institutions is an important task in today's business world. Reducing the number of loans granted to companies of questionable credibility can positively influence banks' performance. The appropriate measurement of potential bankruptcy or probability of default is another step in credit risk management. Among the most commonly used methods, we can enumerate discriminant analysis models, scoring methods, decision trees, logit and probit regression, neural networks, probability of default models, standard models, reduced models, etc. This paper investigates the use of various methods used in the initial step of credit risk management and corresponding decision process. Their potential advantages and drawbacks from the point of view of the principles for the management of credit risk are presented. A comparison of their usability and accuracy is also made.
Author Aleksandra Wójcicka-Wójtowicz (WIiGE / KBO)
Aleksandra Wójcicka-Wójtowicz,,
- Department of Operations Research
Journal seriesOperations Research and Decisions, ISSN 2081-8858, e-ISSN 2391-6060, (B 12 pkt)
Issue year2018
Vol28
No4
Pages99-106
Publication size in sheets0.5
Keywords in Polishryzyko kredytowe, upadłość, bankructwo, zarządzanie ryzykiem kredytowym, modele ryzyka kredytowego
Keywords in Englishcredit risk, default, bankruptcy, credit risk management, credit risk models
DOIDOI:10.5277/ord180407
URL http://www.ord.pwr.wroc.pl/index.php?s=archive
Languageen angielski
Score (nominal)12
Score sourcejournalList
ScoreMinisterial score = 12.0, 24-03-2020, ArticleFromJournal
Publication indicators WoS Citations = 0
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