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Credit risk and commercial banks’ performance in Albania
Published in Sergio Barile, Raul Espejo, Igor Perko, Marialuisa Saviano, Francesco Caputo, Cybernetics and Systems, 2018
Fatmira Kola, Arsena Gjipali, Erjon Sula
The banking sector has a key role in the economic development of each country. The banking sector is a complex system composed of a large number of stakeholders that interact in a non simple way continuously. The banking sector’s classification as complex results, in other words, from varieties heritage. The economies of developing countries like Albania are characterized by high demand for credit due to increasing investment. The revenues are even higher when the risk is greater. The high risk-associated credits leads to high returns. Credit risk is one of the most important kinds of risk in the banking sector that affects bank performance, as it exhibits the loss probability because of the failure of the debtor to fulfill its obligations to the bank. In June 2016 the level of Non Perfoming Loans (NPL) in Albania appeared in 24.4% of total loans, representing a major obstacle to the development and performance of the banking sector in Albania.
Hedging Tools for Managing Risks in Electricity Markets
Published in Mohammad Shahidehpour, Muwaffaq Alomoush, Restructured Electrical Power Systems, 2017
Mohammad Shahidehpour, Muwaffaq Alomoush
Credit risk would estimate the potential loss because of the inability of counterparty to meet its obligations, i.e., it is the risk in the counterparty’s ability or willingness to meet its contractual obligations. An example of credit risk is the situation of a bank that would make loans to customers. If the customers fail to make timely principal or interest payments, the bank could face credit risk.
The shipping company
Published in Alan E. Branch, Michael Robarts, Branch's Elements of Shipping, 2014
Alan E. Branch, Michael Robarts
An area of higher priority in today's business environment is maritime trade credit management. Credit risk is the potential for a company to fail to meet its obligations in accordance with agreed terms. The goal of credit risk management is to maximize the control of the risk of return by maintaining credit risk exposure within acceptable parameters.
Design and Implementation of an Enterprise Credit Risk Assessment Model Based on Improved Fuzzy Neural Network
Published in Applied Artificial Intelligence, 2023
Credit risk refers to the possibility that the borrower who has obtained the bank’s credit support will be unable or unwilling to repay the loan according to the terms of the contract, causing the bank to incur losses. Another prevalent theory holds that credit risk stems from the fluctuating value of the debt market, which is likely to result in certain bank losses. A significant drawback of Fuzzy Logic control systems is that they depend entirely on human knowledge and expertise. A fuzzy system must regularly update the rules of a control system, which is time-consuming and require massive computational resources. The former perspective focuses on whether firms default, whereas the latter examines the value changes of credit assets. Credit risk encompasses, in a broad sense, losses incurred by commercial banks due to a variety of uncertain factors. This paper combines an improved fuzzy neural network with a credit risk assessment model for enterprises. The simulation study demonstrates that the enterprise credit risk assessment model proposed in this paper has a practical risk assessment and response effects.