1. Name:. Course Professor’s name University name City,

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Name:
Course
Professor’s name
University name
City, State
Date of submission

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Introduction
In financial crisis era, risk management and regulations are important component in every
financial sector or industry. Credit risk management, systemic risk and moral hazards can all
help in regulating the banking industry within the world. The focus is on the banking industry
since it is one of the major industry that is faced by a lot of risks. Credit risk management is an
indicator of financial management. A report on the implementation of the sustainable economic
development plan for the industry. Experts say that “indicators of financial stability are generally
in the so-called green zone, the economy is gradually adapting to the new conditions, but
undoubtedly measures are needed that will ensure a transition to sustainable growth (Acemoglu,
Ozdaglar, and Tahbaz-Salehi, 2015). The modern domestic economy is characterized by the
intensification of the processes of globalization and integration, uneven development,
accompanied by crisis processes of external and internal manifestations. The system of sources
of financing of organizations is sensitive to the influence of environmental factors. In the
conditions of instability of the external macroeconomic environment, the risk of attracting and
using external sources of financing increases. Therefore, the problem of optimizing the capital
structure of organizations with regard to the risks of sources of external financing is being
actualized, the solution of which involves identifying the maximum number of parameters
associated with the variety of potentially available sources of funding (Arner, Barberis, and
Buckey, 2016).

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Credit Risk: Evaluation, Analysis, Management
The formation in Banks of a system of independently functioning commercial banks with
particular urgency has revealed the problem of recognizing, evaluating and regulating the risks
arising in their economic activity. Among many banking risks, credit risk is crucial. According to
experts of the Central Bank, made back in 1996, “the main factors destabilizing the financial
condition of both individual credit institutions and the banking system as a whole remained
unsatisfactory production and, as a result, non-return of loans provided to enterprises and
organizations real sector of the economy, as well as the unsatisfactory quality of management of
banks in difficult financial situations (Acharya, et al, 2017). In Banks in general, the share of
overdue Court in the total volume of credit investments in accordance with the bank reporting
was 8% in 1996, and in some regions - more than 20% .
The assessment of credit risk in the activities of credit institutions has not changed in the
future: "The reasons for it Are in insufficiently qualified management of banking risks, primarily
currency and credit, insufficient capital of many banks and excessive enthusiasm for operations
in the financial market, including purely speculative, to the detriment of more labor-intensive
and often less profitable work with the real sector of the economy. Lending to many borrowers
significantly increases the credit risk of banks (Alshatti, 2015).The article discusses the main
credit risk factors and approaches to its management, as well as foreign experience of such
management.
The economic nature and factors of credit risk

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There are various definitions of credit risk in the literature. We will use the following
definition. "Credit risk is the probability that the value of a bank’s assets. First of all, loans will
decrease due to the inability or unwillingness of the client (borrower) to return the debt or part of
the debt, including interest due under the contract. If the bank fails to return the loan, the capital
decreases, and there is a shortage of funds. If credit losses are high, then this can lead to
bankruptcy (Ayadi, et al, 2016). In the case when the amount of non-repaid loans exceeds the
amount of the bank’s own funds, the credit institution objectively becomes insolvent, since the
amount of assets actually held by it turns out to be less than the size of liabilities and their full
payment becomes impossible. At the same time, not only the interests of the owners of the bank
(shareholders, participants), but also the investors - individuals and legal entities, whose accounts
are suspended, suffer.
Some credit Article notes that “the main reasons for the insolvency of banks in countries
with transitional economies are the poor quality of assets and the continued issuance of new
loans that are not repaid on time”. Consider the basic prerequisites and causes of credit risk. Let's
start with the procedure for repayment of loans prescribed by the Banks. It is established by the
Bank of Banks Regulations dated August 31, 1998 No. 54-P "On the Procedure for Providing
(Placing) Credit Institutions by Credit Organizations and their Return (Redemption)."On the date
established by the agreement (agreement), which is the date of repayment of interest or principal
repayment, the accounting officer responsible for maintaining the client's account of the
borrower on the basis of the customer's payment order (or payment requirement of the creditor
bank) issues the fact that the principal and interest have been paid (Banerjee,. and Mio, 2018). If
the payment order is not received or there are not enough funds on the account, then the debt on
the principal debt and accrued but unpaid interest is transferred to the appropriate accounts for