When lending to certain industries

This concerns in particular the coal industry, which is still quite often have a strike, and agriculture, where crop losses are possible due to adverse weather conditions, etc. In addition to the above factors, the sources, causes induce the emergence of credit risk in the banking business can: - Lack of knowledge of banking laws that can not manage effectively - Uncertainty of objectives and criteria - availability of incomplete information, withholding information, lack of information - Lack of time to fully assess the situation - element of chance - Inadequate state regulators. International lending, but credit risk inherent risk, which arises due to the nature of the economy, social structure and political system the borrower. However, this risk should always be taken into account in credit and investment activity (no matter which sector - public or private). One component of country risk is the risk of a transfer, which occurs when the borrower debt denominated in local currency. Despite the financial condition of the borrower's currency debt may simply be unavailable to him. The development of the Ukrainian banking system in recent years is characterized by dynamic growth of credit portfolio, objectively leads to an increase in the level of credit risk. It is obvious that under such conditions, commercial banks have to constantly refine the strategy and tactics of its lending activities. In this regard, relevant to current trends in the banking sector is the analysis and management of credit risk in order to reduce its level. That is described in the next section. Topic: Risks in Banking | Tags: credit