Year of Graduation
The formation of soundness ratings of bank clients: the adequacy of models to the Basel Committee recommendations
As is known, the successful functioning of the banking system depends on an adequate assessment of the expected risks and capital formation for future losses, which correspond to their actual levels. It should be noted that the underestimation or overestimation of the magnitude of credit risk could have a significant impact on the efficiency and stability of the credit institution. For example, at an overvalued level of risk banks have to create redundant storage, which adversely affects the performance of their activities. Real example is the collapse of Lehman Brothers in September 2008, which can help to identify the unreasonableness of many credit risk management practices used by credit institutions worldwide. Consequently, it is necessary to use such an approach to risk assessment, which will optimally affect the financial performance and the reliability of the credit institution. To date, most approaches to assessing and managing credit risk are sufficiently studied and applied by banks. However, the biggest question cause approaches based on the use of internal ratings of banks' clients, as they are the most advanced and at the request of the Basel Committee on Banking Supervision - the most sensitive to changes in credit risk. But how applicable these systems in the Russian reality and effective if they really? This work is directed to the study of these questions. Analyzing the pros and cons of using models based on internal ratings borrowers, it was concluded that it is only a methodology that only if it is proper adaptation to the Russian reality will ensure the creation of efficient credit risk management system. While such conditions in Russia are not fully established and banks can only use the simplified standardized approach in 2013 has begun the transition to the IRB, as even the standardized approach is difficult to implement because of the fact that the Central Bank recognizes only international rankings, which price many small banks can not handle.