hat is, when I do happen to a slight loss, the bank may get a little less profit calculated level.
Area of?? unacceptable risk.the boundaries of this area are possible losses, the value of which exceeds the estimated earnings, but not more than the total size of the settlement proceeds. It is quite obvious that the level of risk is unacceptable, as the bank is in danger of losing all its revenues from this operation, and it would mean that he made pointless costs not only time but also cash.
The area of?? critical risk.is the most dangerous area in which possible losses threaten to compare with the value of the bank's equity. Critical area of?? Risk associated with the concept of bankruptcy, and therefore under no circumstances be allowed a level of risk.the relation between the different areas of risk, you can see those same four points, which were discussed above. These points lie on the boundaries of the regions.action on the risk assessment, consider the following example.several years, lending in most cases short-term nature. We estimate the risk arising from the issuance of short-term loans from banks. To do this, first, with the corresponding statistics of the data bank operations for several years, we calculate the frequency of losses, the level of which can be regarded as the boundary of each of the four areas described. Assume that the frequency of losses in the implementation of short-term lending, the left boundary of the corresponding risk-free area, ie at 0 (see Figure number 2) is equal to 0.8, and the frequency of losses at points A1, B1 , B1, respectively, equal to: 0.55, 0.2 and 0.05. If the statistical number of permits, and still be nice to define a series of intermediate values?? - It only to refine the results., Having at its disposal such factors as the size of losses and their frequency of occurrence, can be plotted between these variables.resulting curve actually represents the ratio of the magnitude of losses and their probability of occurrence, ie, it will be the risk curve, which was discussed above. This curve is shown in figure number 3 .. Number 3of losses
1 0.8A 0.55 In0.2 With0.05D 0 A - 1 B - 1 B - 1
the figure, it is easy to determine what portion AB of the curve will be in the region of acceptable risk, segment BC - in an unacceptable risk, and the section CD - in the field of critical risk . In the realm of critical risk and will treat portion of the curve beyond the point D, that is, beyond the level of a bank failure. Of course, if a more rigorous approach to this question, the point B1, indicating the magnitude of potential losses equal to the size of the bank «s equity, can be transformed into some other point, reflecting the amount of loss for which there is a real threat of a violation of a bank »s liquidity. But while there are difficulties with the choice of the appropriate measure of liquidity, however, if the bank over the years strictly guided by a certain measure of liquidity and corresponding accumulated. Figures, calculations of risk assessment will be logical to build through it .. Method of expert assessmentsmethod differs from the expert assessment method for collecting statistical information only for the construction of the risk curve.method involves the collection and study of assessments made by banking specialists probabilities of occurrence of differe...
