COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE

Regional banks are struggling with significant obstacles in the modern Russian economy. Among them are strong competition with major big banks, strong resource restrictions, tightening the Bank of Russia’s requirements, and quite rapid expansion of financial technologies. Thus, the reduction of regi...

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Autores principales:	A. M. Karminsky, O. D. Khon
Formato:	article
Lenguaje:	EN RU
Publicado:	MGIMO University Press 2018
Materias:	«кредит/залог» International relations JZ2-6530
Acceso en línea:	https://doaj.org/article/b689bbd5c65b4acd999ead792140c0d3
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spelling	oai:doaj.org-article:b689bbd5c65b4acd999ead792140c0d32021-11-23T14:50:40ZCOLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE2071-81602541-909910.24833/2071-8160-2018-1-58-169-185https://doaj.org/article/b689bbd5c65b4acd999ead792140c0d32018-05-01T00:00:00Zhttps://www.vestnik.mgimo.ru/jour/article/view/756https://doaj.org/toc/2071-8160https://doaj.org/toc/2541-9099Regional banks are struggling with significant obstacles in the modern Russian economy. Among them are strong competition with major big banks, strong resource restrictions, tightening the Bank of Russia’s requirements, and quite rapid expansion of financial technologies. Thus, the reduction of regional banks occurs, that produces both a negative impact on the development of small and medium enterprises (SMEs) and challenges for balanced competition on the Russian market. Basically, these banks provide the settlement of region’s social and economic problems while maintaining local companies and enterprises. Collateral, as a source for losses covering, became the essential element of credit risk management in banks. Providing lenders to implement such instruments, it helps to reduce bank losses under borrower’s default. The purpose of the article relates to revealing of collateral determinants with higher impact on bank risk with the application of empirical methods (including regional level). This study is based on linear regression models evaluated by the least square method. Private data of secured small and medium business loans is used. This article presents LTV (loan-to-value) as a major collateral determinant. The empirical evidence of interlinkage between collateral requirements, by the means of LTV, and risk premium is provided for loan portfolio of Russian regional banks. The hypothesis that LTV conversely correlates with risk premium is statistically proved.A. M. KarminskyO. D. KhonMGIMO University Pressarticle«кредит/залог»International relationsJZ2-6530ENRUVestnik MGIMO-Universiteta, Vol 0, Iss 1(58), Pp 169-185 (2018)
institution	DOAJ
collection	DOAJ
language	EN RU
topic	«кредит/залог» International relations JZ2-6530
spellingShingle	«кредит/залог» International relations JZ2-6530 A. M. Karminsky O. D. Khon COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE
description	Regional banks are struggling with significant obstacles in the modern Russian economy. Among them are strong competition with major big banks, strong resource restrictions, tightening the Bank of Russia’s requirements, and quite rapid expansion of financial technologies. Thus, the reduction of regional banks occurs, that produces both a negative impact on the development of small and medium enterprises (SMEs) and challenges for balanced competition on the Russian market. Basically, these banks provide the settlement of region’s social and economic problems while maintaining local companies and enterprises. Collateral, as a source for losses covering, became the essential element of credit risk management in banks. Providing lenders to implement such instruments, it helps to reduce bank losses under borrower’s default. The purpose of the article relates to revealing of collateral determinants with higher impact on bank risk with the application of empirical methods (including regional level). This study is based on linear regression models evaluated by the least square method. Private data of secured small and medium business loans is used. This article presents LTV (loan-to-value) as a major collateral determinant. The empirical evidence of interlinkage between collateral requirements, by the means of LTV, and risk premium is provided for loan portfolio of Russian regional banks. The hypothesis that LTV conversely correlates with risk premium is statistically proved.
format	article
author	A. M. Karminsky O. D. Khon
author_facet	A. M. Karminsky O. D. Khon
author_sort	A. M. Karminsky
title	COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE
title_short	COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE
title_full	COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE
title_fullStr	COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE
title_full_unstemmed	COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE
title_sort	collateral determinats in bank risk mananagement: the regional case
publisher	MGIMO University Press
publishDate	2018
url	https://doaj.org/article/b689bbd5c65b4acd999ead792140c0d3
work_keys_str_mv	AT amkarminsky collateraldeterminatsinbankriskmananagementtheregionalcase AT odkhon collateraldeterminatsinbankriskmananagementtheregionalcase
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COLLATERAL DETERMINATS IN BANK RISK MANANAGEMENT: THE REGIONAL CASE

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