Modern peculiarities of definition of the legal entities credit risk level

Oleksandr Syrchyn
PhD in Economics, Associate Professor, Department of Banking, Odessa National Economic University, е-mail:als.odessa.oseu@yandex.ua

Cite this article:

Syrchyn, О. (2017). Modern peculiarities of definition of the legal entities credit risk level. Ed.: M. Zveryakov (ed.-in-ch.) and others [Suchasni osoblyvosti vyznachennia rivnia kredytnoho ryzyku yurydychnykh osib; za red.: M. I. Zveriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 1 (62), pp. 187–194.

Abstract

Description of describes a modern scientific and practical approach to determining the credit risk of legal entities on the basis of a logistic discriminant model is proposed in the article. It is justified that the calculations based on the proposed model assume the identification of intermediate indicators, which are formed depending on the calculated values of the enterprise financial condition indicators. The estimated artificial values of the model that are used to determine the level of credit risk, taking into account additional indicators determined by the bank independently are given. As a result of the study, it was proved that banks get the opportunity of non-repayment of their credit debts and are able to calculate the amount of credit risk by individual borrowers (taking into account the volume and liquidity of the security for credit), that is the subject to mandatory reservation by bank’s costs. Such an approach reinforces the requirements for loans provided by banks, but is not flexible enough in the face of significant changes in the country’s economic life.

Keywords

central bank; commercial bank; bank’s loan portfolio; credit operations of the bank; the credit risk of the bank borrower; bank reserves on credit operations; indicators of the borrower financial condition; discriminant model of credit risk.

JEL classification: G210;  DOI: https://doi.org/10.33987/vsed.1(62).2017.187-194

UD classification: 336.7

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