Kreditprombank Presents Best Practices of Risk Management
OREANDA-NEWS. June 11, 2013. The Ukrainian academic and practical journal "Banking", the authoritative edition, that regularly publishes the scientific works of Igor Voloshyn, Candidate of Technical Sciences, Director of Financial Risk Management Department, Кreditprombank, in its last issue proposed his new article "Building of the system of Complex Bank Risk Management: Comparison of bank and corporate approaches" describing the system of risk management on the basis of approach "cash flow at risk".
The recession of 2007-08 revealed the serious shortcomings of a modern system of bank risk management. The available management systems grounded on the concept of "economic capital" did not take into account the liquidity risk and integrated only credit, market and operational risks. As a result the existing systems do not protect the banks in full from bankruptcy.
In opinion of the article author it is reasonable to use the experience accumulated in corporate risk management, in particular, system of complex risk management, developed for corporations on the basis of the approach "cash flow at risk", which takes into consideration the interaction of risks.
Besides, it is reasonable to develop, based on the approach, the system of banking products pricing taking into account all risks, including liquidity risk. The systematic accounting of all banking risks through cash flows allows improve substantially the manageability of the bank not only in a short run but in a long term as well.
"New systems of complex risk management in the banks, developed on the basis of the approach "cash flow at risk", will meet at most the interests of depositors, lenders and owners of the bank", - underlines Igor Voloshyn.
Іgor Voloshyn, Candidate of Technical Sciences, is one of the best and authoritative experts of the Ukrainian banking sector, whose scientific and practical researches are regularly published in the leading domestic and foreign printed media, largest world open electronic repositories of scientific works and preprints. Actually he is a participant of the 15th International Conference System Analysis and Information Technologies, the works of which are indexed in Google Scholar, Mendeley and CiteULike. The most interesting issues from the conference will be covered in our further publications.
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