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Credit risk: so far so good.(Credit Column)

Business Credit

| June 01, 2004 | Kalita, Mitali | COPYRIGHT 2004 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Introduction

Managing credit risk has always been a most risky business in the financial services industry. If we look back into the past, we will find that poor management of credit risk was the root cause of most of the major banking disasters the world has ever witnessed.

Being the oldest risk in the market, it was not given much attention and almost remained aloof to the advent of technology until the late 1990s. With the introduction of banking regulations, there is an awareness in the industry now to identify, measure, monitor and control credit risk as well as to determine that they hold adequate capital against this risk. Credit risk not only ...

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