Bank Credit Risk: Challenges and Recommendations During Pandemic

This report delves into the critical impact of the COVID-19 pandemic on the banking industry's credit risk. It begins by outlining the current situation, emphasizing the challenges faced due to increased loan defaults and economic uncertainty. The report identifies key factors influencing bank credit risk, such as the probability of default, loss given default, and exposure at default. It then explores the specific challenges encountered during the pandemic, including credit default risk, concentration risk, and country risk. The report concludes by offering recommendations to improve credit risk management, including setting appropriate credit risk parameters, formulating credit-proof loan structures, and leveraging effective information systems to navigate the crisis and maintain financial stability. The report emphasizes the importance of proactive measures and strategic adaptation to mitigate the adverse effects of the pandemic on the banking sector.