Risk Management

The methodology for risk management and credit control phases: identification, measurement, control and monitoring of risk are essential to mitigate the risks: (See “Management and control of business risks by Felix Campoverde) The criterion for the formulation of policies for granting credit conservative or liberal should not depend on whim or discretion of the directors, but many circumstances and situations: credit rating of the types of customers and products, credit profiles of the prospectus, endogenous and exogenous factors (market) of the lender, because they grant a loan entails the need to find a balance between the imperative to invest on the client (business acumen) and on the other hand, the increased financial needs and costs (economic view). Depending on the situation at all times and circumstances, the institution must establish conditions in policies or other credit. For example, interannual periods, depending on the seasonality of the product or depending on the situation of the economic environment. (If we remember.

The topic management and control of business risk analysis of credit remains quantitative and qualitative). Symptoms and signs of the behavior of the loan portfolio is essential for the classification of current and future customers, for that the methodologies and analytical techniques based on historical behavior of credit operations and quotas, to determine the expected loss on the basis of the probability of default, the level of exposure and the severity of loss for calculation of these components must have a database at least three years immediately preceding, containing sufficient information to calculate expected losses ..