Managing Credit Risk



In repressed financial markets, banks generated surplus profits in part because market entry restrictions enabled them to overcompensate themselves for the credit risk they took while paying low rates of interest on deposits and borrowing. Deregulation of these markets and the accompanying increased competition between banks and non-bank entities reduced the banks’ privileged market position, and eroded their surplus profits. As a result, increased risk-taking and the proper pricing of credit and other risks became central issues for effective management of banks in developing financial markets.


Cash Flow Credit Risk Bank Management Credit Policy Credit Line 
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Copyright information

© Wilbert O. Bascom 1997

Authors and Affiliations

  1. 1.First Equity CorporationUSA

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