拉丁美洲农村金融机构信贷风险管理【外文翻译】

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不良贷款管理中英文对照外文翻译文献不良贷款管理中英文对照外文翻译文献(文档含英文原文和中文翻译)Non-performing Loans Management and RecoveryWilliam J. Bauman and Alan S. BlinderAbstractWith the deepening of China's economic system reform development and continuous improvement of the system of the market economy, banks ' lending business becomes completely open to individuals, personal loans of business growing, continues to expand the scope of business, especially the development of individual housing loan more quickly. Personal housing loan business in China at the time of its development, there are bad credit risks as well as the competitive situation is not optimistic, to a certain extent, hamper the development of individual housing loans, to sustainable development, research management must be strengthened on a number of issues. This article from the current development status of individual housing loan business to start, pointed out that because of the existing problems as well as problems and focus on how to develop personal housing loan bad credit risk reduction, foreign experiences and lessons learned, and thoughts and countermeasures for management, to promote the healthy and rapid development of the business.Key words:Housing loans to individuals; Bad credit risks; present situation; problem; Countermeasure1. IntroductionUnder the five-category loan classification, substandard, doubtful and loss loans are defined as non-performing loans.Because the reasons behind non-performing loans formation are different, credit associates must take effective measures to manage, recover and dispose of these parts of asset according to their different characteristics. The bank should first find out the responsibilities of the guarantor and dispose of the security in time. Only when they confirm that the guarantor has lost the guarantee abilities and the security is not sufficient to pay off the loan, can they begin to dispose of the non-performing loans.2. ReasonsThere are many reasons why banks have poorly performing loan portfolios. Irrespective of these causes, banks have an obligation to shareholders, depositors and creditors to maximize cash flow from assets, the most troublesome aspect of which has been the poor record of banks in recovering loans. It is this factor that has contributed the most to bank insolvency, and liquidity constraints.There are several complementary options available to banks to restructure problem loans and portfolios, including: Exercise of collateral (liens against property, inventories) through judicial or extra-judicial means.Out-of-court settlement that may focus exclusively on debt negotiation, restructuring and repayment, or lead to the financial, physical and operational restructuring of the enterprise.Bankruptcy/liquidation procedures through formal court proceedings. This may involve liquidation, reorganization or privatization of an enterprise to enforce partial or total loan repayment.(Besides the bank itself, sometimes government also leads a restructuring program to help the bank to solve the problem of NPL in order to stabilize the banking industry or the wholeeconomy, for example, Asset Management Company (AMC), a special purpose company, buys or exchanges NPL from bank and disposes of them).3. Work-Out UnitWith aggregate loan portfolios universally troubled by delinquencies and defaults, some banks have opted to develop work-out units to improve loan portfolio quality. When work-out units are established, they are usually set up to deal with most of a bank's problem loans, effectively sectioning off non-performing loans from the broader bank portfolio of performing loans. The benefits expected from work-out units include;Concentrated focus on the recovery of problem loans;More developed banking expertise and credit risk evaluation skills;Improved internal bank system (early warning systems, collateral requirements, credit information needs).Work-out units can make a significant difference in restructuring loan portfolios, particularly when supported by effective technical assistance.4.Loan Restructuring and Loan "Rollover"Case-by-case loan restructuring is common in market-oriented economies, particularlywhen borrowers are unable to meet the original terms of the loan agreement due to external factors. These restructuring invariably changes in the amount, terms and /or schedule of interest rates, principal repayment, and collateral values. Loan covenants ( ratios, report requirements) often change to facilitate compliance. In some cases, radical measures such as replacing management are involved.This approach is similar to what work-out units attempt todo: recover portions of loan portfolios which have deteriorated and are non-performing. However, workout units are often organized on the basis of sector, location or bank exposure. Case-by-case loan restructuring is conducted on an individualized basis. The benefits of individual case-by-case loan restructurings include:Reinforcement of the bank-client relationship.Retention of the loan by the bank on its balance sheet, even if provisions are made for possible losses.Preservation of the firm's relations with other parties (trade creditors, other banks, buyers, employees), thereby maintaining its reputation without embarrassing and costly bankruptcy / liquidation procedures.As with debt-equity swaps, the risk to the bank is that it is overly optimistic about prospects, and that additional resources are committed to the borrower adding to bank losses and reduced loan able funds at a future date. This has occurred frequently in transition economies (such as China, East European countries, former Soviet Union).In transition economy banks, the closest approximation to the Western loan restructuring has been the loan "rollover" which has been a common practice. Rollovers generally involve the following two techniques:Simple rollover of principal on/before the due date, with the enterprise meeting interest obligations.Rollover of principal on/before due date, with interest added b ack to the principal amount (“interest capitalization").The first technique is legitimate and rational unless the enterprise is unable to repay principal, and likely to remain impaired in the future. The second technique often reflects atroubled loan and enterprise, and has been typically practiced in transition economy banking systems. Further more, the latter technique has been accompanied by accounting treatment which mistakenly recognizes these assets as performing loans, artificially inflating income statements and balance sheet book values.5. Debt-equity Swaps and Loan Sales / Asset SwapDebt-equity swap results in bank ownership of enterprises occur with differing frequencies in different countries. In some countries, bank ownership of enterprises is common (German interlocking directorates), while in other countries it is strictly regulated (USA) or strictly prohibited (In China, debt-equity swap is done through asset management company). By swapping NPL for equity, banks can exercise more directcontrol/supervision over enterprise management while the enterprise benefits from increased debt capacity. The risk to bank is excess exposure to a risky investment which may jeopardize deposit safety and bank capital, and demand scarce management time and resources.Debt-equity swap represents nascent venture capital operation. Perhaps only one in 10 of these investments may succeed, but this should be sufficient to cover the risk of the other nine losing investment. Given existing low book values and the currently thin market that is likely to improve in the coming years, banks are prudent to allocate a small percentage of assets to enterprises they believe will generate significant profit at a later date. At that point, banks can sell their shares, and reap significant profit to bolster capital. All of this makes more sense given the current downside risk, which is limited, as most of these transactions are paper transactions that do not further impairbank liquidity.But bank equity swap may be indicative of the failure of banks in some countries to properly define bank's roles as financial intermediaries, streamline their operations, specialize in a few key areas within the limit of their current managerial and staffing capabilities, write down their assets to more accurate values, and progress toward a more stable and prudently managed system devoid of excess risk. Investment in losing enterprises raises the risk of future liquidity being drained to prop up these enterprises in the hope of eventual profitability, which puts depositors and shareholders at risk.In addition to debt-equity swaps, loan sales swaps are an option that could be used to restructure bank balance sheets. However, this option has not been commonly found in transition economy due to absence of secondary market development.6. Securitization of Non-performing LoanNon-performing loan securitization is a pooling of non-performing loans packaged and issued as securities to investors through arrangements of legal structure, cash flow, and credit rating mechanisms. Non-performing Loans are also known as bad loans, overdue loans, receivables under collection, and loans still under normal payment statuses, but with circulating bonds rated lower than CCC level. During the securitization period, the originator (seller) will select the most ideal portfolio based on a set of eligibility criteria, such as debtors' locations, credit period, currency, and overdue ratings from all available non-performing loans.After the screening process, bank will proceed with the risk assessment, cash flow simulation and credit tranche. The securities are then offered to investors after confirmation fromcredit rating agencies and regulatory approval obtained. The asset management agency is particularly important to a non-performing loan securitization since the asset management agency's expertise is instrumental to increasing collection rates of these non-performing loans. Investors' risks are minimized through credit enhancement techniques; default risks, prepayment risks, etc. are also emphasized to evaluate the risk profile of non-performing loans.7. In-court Bankruptcy / Liquidation ProceedingsResorting to legal procedures to collect the repayment of non-performing loans is the last defense line. In practice, banks should grasp the timing of litigation. Because blind lawsuits will involve banks' time, energy, money and people. In addition, they could have negative impact on the relationship between banks and their clients.Firstly, before litigation, banks should investigate the borrowers' income resources and asset categories and prevent them from hiding or transferring asset in this period of time. Banks can apply to the court for asset preservation. Secondly, banks should try best to correct the deficiencies of credit documents and win themselves advantageous conditions in litigation. Thirdly, banks should also prepare themselves for the results of reconciliation or failure.Bankruptcy/liquidation is an effective complement to out-of-cnurt approaches, and serves as a last stage of debt collection, providing creditors with control over debtors in financial distress and prompting their restructuring. For this reason, many countries (transition economies) have developed and are seeking to expand the use of formal bankruptcy to broaden the array of dispute resolution mechanisms, provide banks with long neededrecourse, and instill greater financial discipline on enterprises.8. Exercise of CollateralWhen a debt matures or is going to mature and the debtor has encountered serious operation difficulties, the debtor cannot repay the loan in cash and the guarantor cannot repay the loan in cash either. Maybe after negotiation, the two parties (the bank and the borrower) or three parties (the bank, the borrower and the guarantor) can reach a consensus. In line with the consensus or the ruling by the court, the debtor or the guarantor can make in-kind repayment of debts, which is one of the important means to dispose of non-performing loans.9. Writing-off Bad LoansIn accordance with relevant state rules and regulation, if the principal of a loan is identified as unrecoverable, the bad loan can be written off. Writing-off of bad loans is the internal activity of a bank. So the bank still enjoys the recourse right and should continue to demand the repayment of the fund.10. ConclusionWere analyzed by the non-performing loans management recycling. Bad credit risk management, there are still many problems to be solved, how the lending business in the international financial place needs to be further research and continue to explore. In short,the management of non-performing loans of China's economic development has made a significant contribution, but there are still shortcomings in their own system, the external competitive environment in the development of the personal loan there are many adverse, which requires countries to fully understand individual housing loans an important role on the basis of, for the banks internal management and external riskmanagement and reasonable planning to ongoing development. Personal loans also have to recognize their own position and where to adopt appropriate strategies and market positioning, innovation, adjustment, reform, focusing on risk management in order to more rapidly grow.ReferencesSteven Husted,Michael Melvin, International Economics [M], (the fifth edition), Higher Education Press, 2002Beck, T., Demirguc-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to growth: Does firm size matter? The Journal of Finance, 60, 137–177.Peng, Y. (2004). Kinship networks and entrepreneurs in China's transitional economy. American Journal of Sociology, 109,1045–1074Qian, Y. (2000). The process of China’s market transition (1978–1998):The evolutionary, historical, and comparative perspectives. Journal of Institutional and Theoretical Economics, 156, 151–171.Shane, S., & Cable, D. (2002). Network ties, reputation, and the financing of new ventures. Management Science, 48, 364–381.Newton, K. (2001). Trust, social capital, civil society, and democracy.International Political Science Review, 22, 201–214.Liu, Z. (2003). The economic impact and determinants of investment in human and political capital in China. Economic Development and Cultural Change, 51, 823–850. Birner, R., & Witter, H. (2003). Using social capital to create politicalcapital. In The commons in the New Millennium: Challenges andadaptation (pp. 291–334). Cambridge and London: MIT Press.不良贷款的管理和回收威廉J鲍姆，阿伦S布林德摘要随着我国金融体系建设的进一步发展和市场体制的迅速完善，银行的贷款业务逐渐向个人完全展开，个人贷款的业务种类不断增多，业务范围持续扩大，特别是个人住房贷款业务的发展更为迅猛。

民间借贷风险外文文献翻译2014年译文3000多字The Study of Private Lending RisksRicardo CorreaAbstract:Private lending comes in us forms and has unique characteristics that pose risks。

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原文The Question of Sustainability forMicrofinance Institutions1.PrefaceMicroentrepreneurs have considerable difficulty accessing capital from mainstream financial institutions. One key reason is that the costs of information about the characteristics and risk levels of borrowers are high. Relationship-based financing has been promoted as a potential solution to information asymmetry problems in the distribution of credit to small businesses. In this paper, we seek to better understand the implications f or providers of “microfinance” in pursuing such a strategy. We discuss relationship-based financing as practiced by microfinance institutions (MFIs) in the United States, analyze their lending process, and present a model for determining the break-even price of a microcredit product. Comparing the model’s results with actual prices offered by existing institutions reveals that credit is generally being offered at a range of subsidized rates to microentrepreneurs. This means that MFIs have to raise additional resources from grants or other funds each year to sustain their operations as few are able to survive on the income generated from their lending and related operations. Such subsidization of credit has implications for the long-term sustainability of institutions serving this market and can help explain why mainstream financial institutions have not directly funded microenterprises. We conclude with a discussion of the role of nonprofit organizations in small business credit markets, the impact of pricing on their potential sustainability and self-sufficiency, and the implications for strategies to better structure the credit market for microbusinesses.2.The MFI Lending Model in the United StatesMarketingMarketing drives the business model in terms of the volume of potential borrowers that an MFI is able to access and the pool of loans it can develop. Given that MFIs do not accept deposits and have no formal prior insight into a freshpotential customer base, they must invest in attracting new borrowers. Marketing leads are generated from a variety of sources: soliciting loan renewals fromexisting borrowers, marketing to existing clients for referrals, “grassroots” networking with institutions possessing a complimentary footprint in the target environment, and the mass media.At the outset of operations, before a borrower base is developed, portfolio growth is determined by the effectiveness of marketing through network and mass media channels. Once a borrower pool is established, marketing efforts can be shifted toward lower-cost marketing to existing borrowers and their peer networks. Even so, loans will likely attrite from a portfolio at a faster rate than renewals and borrower referrals can replenish it—new leads must continue to be generated through other, less effective channels.The Loan Application ProcessIn economic terms, the loan application process represents an investment at origination with the aim of minimizing credit losses in the future. All else being equal, a greater investment in the credit application process will result in lower subsequent rates of delinquency and default; conversely, a less stringent process would result in greater rates of credit loss in the future. Setting the appropriate level of rigor in a credit application process is an exercise in analyzing loanapplicant characteristics and forecasted future behaviors while being cognizant of the cost of performing these analyses.Three steps characterize the loan application process.Preliminary Screen. The applicant is asked a short set of questions to establish the applicant’s eligibility for credit under the MFI’s guidelines. This is sufficient to determine the likely strength of an application and whether an offer of credit could, in principle, be extended.Interview. At the interview stage, due diligence is performed to ensure that the loan purpose is legitimate and that the borrower’s business has sufficient capacity and prospects to make consistent repayments. Cash-flow analysis is the core of the MFI due diligence procedure and for microfinance borrowers the data is often insufficiently formal, hindering easy examination of cash flow stability and loanpayment coverage. As a result, this is a less standardized, more timeconsuming task than its equivalent in the formal lending markets.Underwriting and Approval. If a loan is recommended by an officer following the interview the application is then stresstested by an underwriter, who validates the cash flow and performs auxiliary analysis to ensure that the loan represents a positive addition to the lending portfolio.The dynamics of loan origination illustrate the trade-offs to be made to ensure an efficient credit process. Improved rigor could lead to a higher rate of declined applicants, and so higher subsequent portfolio quality, but at the expense of increased processing costs. For medium and larger loans, as application costs increase past an optimal point, the marginal benefit of improved portfolio quality is outweighed by the marginal expense of the credit application itself. However, for small loans there exists no such balance point—the optimal application cost is the least that can be reasonably achieved. This motivates a less intensive credit application process, administered when a loan request falls beneath a certain threshold, typically a principal less than $5,000. MFIs can disburse such loans more quickly and cheaply by fast-tracking them through a transaction-based process and context learning.Loan MonitoringPost-loan monitoring is critical toward minimizing loss. In contrast to the credit application process, which attempts to preempt the onset of borrower delinquencyby declining high risk loans, monitoring efforts minimize the economic impact of delinquency once a borrower has fallen into arrears. In addition to the explicit risk to institutional equity through default, managing delinquent borrowers is an intensive and costly process.When dealing with repeat clients, there exists the opportunity to leverage information captured through monitoring on previous loans, enabling the MFI to shorten the full credit application without materially impacting the risk filter. In short, there is an opportunity to reduce operational costs without a corresponding increase in future loss rates. Repeat borrowers enable the information accrued during the relationship to be leveraged to mutual benefit of MFI and borrower. In this case, much of the information required to validate a loan application has been gathered during theprevious lending relationship. An MFI will al so possess the borrower’s payment history, a more accurate indicator of future performance than an isolated financial snapshot taken during the standard application process. The challenge, however, is that for many MFI, a part of their mission is to graduate customers into mainstream commercial banking, which would not allow the MFI to collect additional interest payments from those customers.Overhead CostsFor an MFI to sustain itself, each outstanding balance must contribute a proportional amount to institutional costs. Institutional costs are driven primarily by the size of the portfolio being maintained. The necessary staff, tools, technology, work environment, and management are functions of portfolio scale.We outline in Table 2 the institutionallevel costs of five MFIs with varying portfolio sizes to identify the proportional cost loading necessary to guarantee that central costs are compensated for. The table shows that institutional costs increase at a slower rate than the rate at which the loan portfolio grows, so that the overhead allocation declines as an MFI achieves scale. We find that an MFI with a $500,000 portfolio will incur indirect costs of 26 percent, while an MFI with a $20 million portfolio will experience a much lower indirect cost loading of 6 percent. In the United States, the largest institution engaging solely in microfinance presently has a portfolio of $15 million.3.Discussion and ConclusionsContinued subsidization of credit also has implications for the long-term sustainability of MFIs. Our high-level analysis of projected self-sufficiency levels of various MFI sizes shows the importance of pricing appropriately. Even a modest deviation from the value-neutral price has a significant impact on the amount of subsidies needed to sustain the institution. As a consequence, it is imperative that MFIs rigorously analyze the true costs and review their pricing structures accordingly.It has yet to be demonstrated that microfinance can be performed profitablyin the United States. Nondepository MFIs may not have better information and/or technology to identify and serve less risky microbusinesses than formal institutions. Itwould therefore appear that formal institutions are acting rationally in choosing not toserve this market at present. However, MFIs have succeeded in channeling capital to microbusinesses. Still, MFIs often operate with certain public and/or private subsidies. Ultimately, more research is needed to ascertain whether the provision of microfinance offers a societal benefit in excess of economic costs. This paper is oneof the first to document a very wide dispersion in the difference between value-neutral and actual pricing for a sample of MFIs. This suggests a wide dispersion in the economic subsidies inferred by these MFIs. More specifically,these subsidies are not being allocated on a consistent basis.If subsidies are required to serve the market at palatable interest rates for lenders and borrowers, it is incumbent on the microfinance industry to demonstrate that theirs is an efficient mechanism for delivering such subsidies. Once a subsidy is justified, institutions must be motivated to improve their operational efficiency so that they may offer microfinance borrowers the lowest possible equitable prices while notjeopardizing institutional viability.外文题目：The Question of Sustainability for Microfinance Institutions 出处：Journal of Small Business Management 2007 45(1), pp.23–41.作者：J. Jordan Pollinger, John Outhwaite,and Hector Cordero-Guzmán译文：小额信贷的可持续发展问题（一）前言微型企业从主流金融机构获得资金有相当大的困难，其中的一个重要原因是对了解借款者所花费的信息费以及风险等级是很高的。

外文文献翻译Commercial Bank Risk Management: An Analysis of the Process外文文献：Commercial Bank Risk Management: An Analysis of the Process AbstractThroughout the past year, on-site visits to financial service firms were conducted to review and evaluate their financial risk management systems. The commercial banking analysis covered a number of North American super-regionals and quasi±money-center institutions as well as several firms outside the U.S. The information obtained covered both the philosophy and practice of financial risk management. This article outlines the results of this investigation. It reports the state of risk management techniques in the industry. It reports the standard of practice and evaluates how and why it is conducted in the particular way chosen. In addition, critiques are offered where appropriate. We discuss the problems which the industry finds most difficult to address, shortcomings of the current methodology used to analyze risk, and the elements that are missing in the current procedures of risk management.1. IntroductionThe past decade has seen dramatic losses in the banking industry. Firms that had been performing well suddenly announced large losses due to credit exposures that turned sour, interest rate positions taken, or derivative exposures that may or may not have been assumed to hedge balance sheet risk. In response to this, commercial banks have almost universally embarked upon an upgrading of their risk management and control systems.Coincidental to this activity, and in part because of our recognition of the industry's vulnerability to financial risk, the Wharton Financial Institutions Center, with the support of the Sloan Foundation, has been involved in an analysis of financial risk management processes in the financial sector. Through the past academic year, on-site visits were conducted to review and evaluate the risk management systems and the process of risk evaluation that is in place. In the banking sector, system evaluation was conducted covering many of North America'ssuper-regionals and quasi±money-center commercial banks, as well as a number of major investment banking firms. These results were then presented to a much wider array of banking firms for reaction and verification. The purpose of the present article is to outline the findings of this investigation. It reports the state of risk management techniques in the industry—questions asked, questions answered, and questions left unaddressed by respondents. This report can not recite a litany of the approaches used within the industry, nor can it offer an evaluation of each and every approach. Rather, it reports the standard of practice and evaluates how and why it is conducted in the particular way chosen. But, even the best practice employed within the industry is not good enough in some areas. Accordingly, critiques also will be offered where appropriate. The article concludes with a list of questions that are currently unanswered, or answered imprecisely in the current practice employed by this group of relatively sophisticated banks. Here, we discuss the problems which the industry finds most difficult to address, shortcomings of the current methodology used to analyze risk, and the elements that are missing in the current procedures of risk management and risk control.2. What type of risk is being considered?Commercial banks are in the risk business. In the process of providing financial services, they assume various kinds of financial risks. Over the last decade our understanding of the place of commercial banks within the financial sector has improved substantially. Over this time, much has been written on the role of commercial banks in the financial sector, both in the academic literature and in the financial press. These arguments will be neither reviewed nor enumerated here. Suffice it to say that market participants seek the services of these financial institutions because of their ability to provide market knowledge, transaction efficiency and funding capability. In performing these roles, they generally act as a principal in the transaction. As such, they use their own balance sheet to facilitate the transaction and to absorb the risks associated with it.To be sure, there are activities performed by banking firms which do not have direct balance sheet implications. These services include agency and advisoryactivities such as(1) trust and investment management;(2) private and public placements through ``bestefforts'' or facilitating contracts;(3) standard underwriting through Section 20 Subsidiaries of the holding company;(4) the packaging, securitizing, distributing, and servicing of loans in the areas of consumer and real estate debt primarily.These items are absent from the traditional financial statement because the latter rely on generally accepted accounting procedures rather than a true economic balance sheet. Nonetheless,the overwhelming majority of the risks facing the banking firm are on-balance-sheet businesses. It is in this area that the discussion of risk management and of the necessary procedures for risk management and control has centered. Accordingly, it is here that our review of risk management procedures will concentrate.3. What kinds of risks are being absorbed?The risks contained in the bank's principal activities, i.e., those involving its own balance sheet and its basic business of lending and borrowing, are not all borne by the bank itself. In many instances the institution will eliminate or mitigate the financial risk associated with a transaction by proper business practices; in others, it will shift the risk to other parties through a combination of pricing and product design.The banking industry recognizes that an institution need not engage in business in amanner that unnecessarily imposes risk upon it; nor should it absorb risk that can be efficiently transferred to other participants. Rather, it should only manage risks at the firm level that are more efficiently managed there than by the market itself or by their owners in their own portfolios. In short, it should accept only those risks that are uniquely a part of the bank's array of services. Elsewhere (Oldfield and Santomero, 1997) it has been argued that risks facing all financial institutions can be segmented into three separable types, from a management perspective. These are:1. risks that can be eliminated or avoided by simple business practices;2. risks that can be transferred to other participants;3. risks that must be actively managed at the firm level.In the first of these cases, the practice of risk avoidance involves actions to reduce the chances of idiosyncratic losses from standard banking activity by eliminating risks that are superˉuous to the institution's business purpose. Common risk-avoidance practices here include at least three types of actions. The standardization of process, contracts, and procedures to prevent inefficient or incorrect financial decisions is the first of these. The construction of portfolios that benefit from diversification across borrowers and that reduce the effects of any one loss experience is another. The implementation of incentivecompatible contracts with the institution's management to require that employees be held accountable is the third. In each case, the goal is to rid the firm of risks that are not essential to the financial service provided, or to absorb only an optimal quantity of a particular kind of risk.There are also some risks that can be eliminated, or at least substantially reduced through the technique of risk transfer. Markets exist for many of the risks borne by the banking firm. Interest rate risk can be transferred by interest rate products such as swaps or other derivatives. Borrowing terms can be altered to effect a change in their duration.Finally, the bank can buy or sell financial claims to diversify or concentrate the risks that result from servicing its client base. To the extent that the financial risks of the assets created by the firm are understood by the market, these assets can be sold at their fair value. Unless the institution has a comparative advantage in managing the attendant risk and/or a desire for the embedded risk which they contain, there is no reason for the bank to absorb such risks, rather than transfer them.However, there are two classes of assets or activities where the risk inherent in the activity must and should be absorbed at the bank level. In these cases, good reasons exist for using firm resources to manage bank level risk. The first of these includes financial assets or activities where the nature of the embedded risk may be complex and difficult to communicate to third parties. This is the case when the bank holds complex and proprietary assets that have thin, if not nonexistent, secondarymarkets. Communication in such cases may be more difficult or expensive than hedging the underlying risk. Moreover, revealing information about the customer may give competitors an undue advantage. The second case includes proprietary positions that are accepted because of their risks, and their expected return. Here, risk positions that are central to the bank's business purpose are absorbed because they are the raison of the firm. Credit risk inherent in the lending activity is a clear case in point, as is market risk for the trading desk of banks active in certain markets. In all such circumstances, risk is absorbed and needs to be monitored and managed efficiently by the institution. Only then will the firm systematically achieve its financial performance goal.4. How are these risks managed?In light of the above, what are the necessary procedures that must be in place in order to carry out adequate risk management? In essence, what techniques are employed to both limit and manage the different types of risk, and how are they implemented in each area of risk control? It is to these questions that we now turn. After reviewing the procedures employed by leading firms, an approach emerges from an examination of large-scale risk management systems. The management of the banking firm relies on a sequence of steps to implement a risk management system. These can be seen as containing the following four parts:1. standards and reports,2. position limits or rules,3. investment guidelines or strategies, and4. incentive contracts and compensation.In general, these tools are established to measure exposure, define procedures to manage these exposures, limit individual positions to acceptable levels, and encourage decision makers to manage risk in a manner that is consistent with the firm's goals and objectives. To see how each of these four parts of basic risk-management techniques achieves these ends, we elaborate on each part of the process below. In section 4 we illustrate how these techniques are applied to manage each of the specific risks facing the banking community.1.Standards and reports.The first of these risk-management techniques involves two different conceptual activities, i.e., standard setting and financial reporting. They are listed together because they are the sine qua non of any risk system. Underwriting standards, risk categorizations, and standards of review are all traditional tools of risk management and control. Consistent evaluation and rating of exposures of various types are essential to an understanding of the risks in the portfolio, and the extent to which these risks must be mitigated or absorbed.The standardization of financial reporting is the next ingredient. Obviously, outside audits, regulatory reports, and rating agency evaluations are essential for investors to gauge asset quality and firm-level risk. These reports have long been standardized, for better or worse. However, the need here goes beyond public reports and audited statements to the need for management information on asset quality and risk posture. Such internal reports need similar standardization and much more frequent reporting intervals, with daily or weekly reports substituting for the quarterly GAAP periodicity.2.Position limits and rules.A second technique for internal control of active management is the use of position limits, and/or minimum standards for participation. In terms of the latter, the domain of risk taking is restricted to only those assets or counterparties that pass some prespecified quality standard. Then, even for those investments that are eligible, limits are imposed to cover exposures to counterparties, credits, and overall position concentrations relative to various types of risks. While such limits are costly to establish and administer, their imposition restricts the risk that can be assumed by anyone individual, and therefore by the organization as a whole. In general, each person who can commit capital will have a well-defined limit. This applies to traders, lenders,and portfolio managers. Summary reports show limits as well as current exposure by business unit on a periodic basis. In large organizations with thousands of positions maintained, accurate and timely reporting is difficult, but even more essential.3.Investment guidelines and strategies.Investment guidelines and recommended positions for the immediate future are the third technique commonly in use. Here, strategies are outlined in terms of concentrations and commitments to particular aras of the market, the extent of desired asset-liability mismatching or exposure, and the need to hedge against systematic risk of a particular type.4.Incentives schemes.To the extent that management can enter incentive compatible contracts with line managers and make compensation related to the risks borne by these individuals, then the need for elaborate and costly controls is lessened. However, such incentive contracts require accurate position valuation and proper internal control systems.中文译文：商业银行的风险管理：一个分析的过程摘要在过去一年里,我们通过现场参观金融服务公司来进行审查和评估其金融风险管理系统。

农村金融小额信贷中英文对照外文翻译文献(文档含英文原文和中文翻译)RURAL FINANCE: MAINSTREAMING INFORMAL FINANCIAL INSTITUTIONSBy Hans Dieter SeibelAbstractInformal financial institutions (IFIs), among them the ubiquitous rotating savings and credit associations, are of ancient origin. Owned and self-managed by local people, poor and non-poor, they are self-help organizations which mobilize their own resources, cover their costs and finance their growth from their profits. With the expansion of the money economy, they have spread into new areas and grown in numbers, size and diversity; but ultimately, most have remained restricted in size, outreach and duration. Are they best left alone, or should they be helped to upgradetheir operations and be integrated into the wider financial market? Under conducive policy conditions, some have spontaneously taken the opportunity of evolving into semiformal or formal microfinance institutions (MFIs). This has usually yielded great benefits in terms of financial deepening, sustainability and outreach. Donors may build on these indigenous foundations and provide support for various options of institutional development, among them: incentives-driven mainstreaming through networking; encouraging the establishment of new IFIs in areas devoid of financial services; linking IFIs/MFIs to banks; strengthening Non-Governmental Organizations (NGOs) as promoters of good practices; and, in a nonrepressive policy environment, promoting appropriate legal forms, prudential regulation and delegated supervision. Key words: Microfinance, microcredit, microsavings。

中文4100字，2400单词，12500英文字符出处：Barrès I. The Management of Foreign Exchange Risk by Microfinance Institutions and Microfinance Investment Funds[M]// Microfinance Investment Funds. Springer Berlin Heidelberg, 2006:115-146.原文：The Management of Foreign Exchange Risk by Microfinance Institutions and Microfinance Investment FundsIsabelle BarresThe term “MFI” is used broadly in this chapter to encompass institutions thatprovide small-scale financial services, such as loans, savings, insurance, remittancesand other services (generally in amounts less than 250 % of GNP per capita). Theterm encompasses a wide variety of organizations: NGOs, credit unions, non-bankfinancial intermediaries, rural banks, etc.Most microfinance investment funds (MFIFs) and other funders such as officialdevelopment agencies finance their activities in US dollars (USD) or Euros (EUR),which may be called “hard currencies.”However, most microfinance institutions(MFIs) operate in nondollarised or non-Euro-based economies and lend local currencyto their clients.Funding in one currency and lending in another, and the probability that therelative values of the two currencies will alter, creates foreign exchange (FX) risk.V olatile currency exchange rate fluctuations in many countries where MFIs operatemake FX risk a serious issue, but one that has often been accorded little urgency inmicrofinance. The accelerated development of microfinance through access to capitalmarkets makes it imperative that foreign exchange be managed in ways that areconsistent with best practice in finance. Until this is widely achieved, access to capitalmarkets for the benefit of microfinance will be retarded.Foreign exchange risk is one of many risks that MFIFs face. Interest rate risk isan additional risk that is related to FX risk. As currency values change, interestexpense or income will also change. And, spreads between interest rates on both sidesof the balance sheet may change, that is, interest rates on money borrowed in onecurrency by a microfinance institution, for example, may diverge from interest rates on money loaned to micro entrepreneurs by the MFI. Each of these effects has implications for MFIF and MFI profitability. For purposes of economy, these second order exchange risks are not discussed further here in.This chapter explores the nature of FX risk in debt funding by focusing on which party is likely to bear the risk of exchange rate fluctuations in different situations at different points in a funding transaction. The importance of hedging is noted, and mechanisms are listed that MFIFs and MFIs use to address their respective FX risks.The relationships between currency and risk described below apply to equity funds, while in the case of guarantee funds the situation is reversed. Equity investments, as capital, are always in the currency of the MFI. For the foreign equity investor, “foreign exchange risk becomes one of several risks associated with an investment rather than a central factor in making a loan.”Equity and guarantee funds, while not the focus of this chapter, are included in the Appendices with examples to identify when they face a currency risk and the hedging mechanisms they use.The most common foreign exchange risk possibilities are summarized in Table. These combinations involve positions in Euros (EUR) and local currency, US dollars (USD) and local currency, and between EUR and USD, that comprise the currencies in which assets and liabilities are held by MFIs and MFIFs. Generalizing, we assume that before the MFI receives funding, it has no currency mismatch. Its “operating currency,”the currency in which its assets are denominated, is the same as its “funding”currency, which is the currency in which its liabilities are denominated.The example of change in value of the EUR against the USD is an interesting one to examine. Over a 2-year period, the EUR gained close to 40% of its value against USD. This large change in the relative values of two “hard”currencies was underestimated by many MFIs and MFIFs. The EUR was launched in 2002 at USD 1.17, and subsequently fell to less than USD 0.90. Recently, however, the EUR has appreciated considerably against the USD, and many European MFIFs operating in EUR and lending in USD in dollarizsed countries in Latin America have incurredsignificant losses from the transactions.The sharp appreciation of the EUR against the USD has created significant exchange losses on the EUR loans of many MFIs, which in some cases will require restructuring. The ASN-Novib Fonds is an example. It is an MFIF in the Netherlands that lends in hard currency (both USD and EUR), with most of its portfolio concentrated in Latin America. It is seeking opportunities in Asia and Africa if the foreign exchange risks can be hedged. In the past, the ASN-Novib Fonds made EUR loans to MFIs operating in dollarised economies, but the lack of hedging by its client MFIs and subsequent losses have forced ASN-Novib Fonds to discontinue unhedged EUR funding, which it considers too risky for the MFIs. On the other hand, MFIs borrowing in USD and on-lending in EUR have experienced currency gains their Euro-equivalent USD repayments of principal and interest have diminished considerably.Regardless of who bears the direct currency risk (i. e., direct losses from currency fluctuations), both parties are at risk for indirect losses resulting from currency risk. For example, if an MFIF suffers losses and downscales operations or changes the allocation of countries in which it invests, client MFIs may lose access to a funder that has been helpful in the past. On the other hand, MFIFs face increased credit risk (i. e., an indirect currency risk in this case), when MFIs have not hedged their currency risk and suffer subsequent losses that affect their profitability and long term viability. In this sense, some dimensions of currency risk are always shared between the MFIF and the MFI, regardless of which bears the direct risk, as portrayed in the examples above.Because of direct and indirect FX risks, MFIFs and MFIs are working together to develop hedging mechanisms in countries where the capital markets may offer few of the hedging options that are available in developed countries. To mitigate indirect currency risks, most MFIFs try to assess whether it is reasonable for their client MFIs to borrow in a certain currency. They examine their funding and operating currencies and monitor their overall foreign currency exposure on a regular basis as part of their due diligence process. MFIFs that have adopted these procedures include BIO,Cordaid, Etimos, Incofin, Luxmint-ADA, Rabobank and Triodos. Exposure analysis varies, and is not used in every case. Informal cross-checking among MFIFs also helps raise their awareness of the foreign exchange exposure of their affiliates. Some MFIFs such as ASN-Novib Fonds have changed their policies to reduce MFI currency risks.Interviews conducted by ADA, CGAP, and The MIX for the KfW symposium in 2004 shed some light on MFIFs’perceptions of FX risk. The study found that perceptions of the degree of risk linked to currency fluctuations depend largely on direct currency exposure, although most MFIFs interviewed expressed great concern for the larger issue whether or not they directly faced a risk–because of the potential repercussions of a loss incurred by MFIs as a result of transactions with an MFIF.When asked: “Is foreign exchange risk a big issue for the MFIs that you invest in?”, MFIFs were almost unanimous in saying that foreign exchange risk is a major issue in lending to MFIs because it increases the risk of losses, regardless of who assumes the risk. MFIFs that shared this view included BIO, Cordaid, Luxmint-ADA, Rabobank, and Triodos. Some MFIFs, including BIO, Cordaid, and PlaNet Fund, were nevertheless willing to assume greater FX risk, or were generally less concerned about it, for several reasons: The potential currency losses linked to currency risk discussed previously contrast with the responses regarding risk mitigation. While levels of risk vary, not enough is being done from the perspectives of both MFIFs and MFIs. Many MFIFs and MFIs that should hedge because of the level of their exposure do not have hedging mechanisms in place, for a variety of reasons explored below. Of the 64 MFIFs analyzed for the KfW symposium and through The MIX Market, 49 provided the currency breakdown of their microfinance investment portfolios. Of these, 46 provided information about their hedging policies –or lack thereof. Only a little over 40% (19) of the MFIFs that gave details of their hedging policies indicated that they had a hedging policy in place.As noted previously, not all MFIFs need to hedge. MFIFs that offer funding in their currency of operations have no FX risk and therefore do not have hedging policies in place.Excepting the 7 MFIFs that were not exposed to direct currency risk, 20 MFIFs, about 50% of the 39 that faced exposure from currency risk, did not have hedging mechanisms in place, as illustrated in Table . Failures to hedge adequately created losses for several of the MFIFs studied, including many European microfinance investors, such as NOVIB (on local currency loans and participations in Ethiopia, Kenya, Mexico, Mozambique, Peru, Senegal, Sri Lanka, Tanzania and Uganda), Cordaid (on loans in Bangladesh, Bosnia and Herzegovina, Brazil, Colombia, the Dominican Republic, Ghana, India, Indonesia, Morocco, Peru, Philippines, etc, and others.How are exchange rate losses treated in accounting information? Some MFIFs show returns prior to exchange rate losses while others show returns after exchange rate losses. Lack of standardisation produces important differences in the overall return, often turning a positive return into a negative one. This difference should be taken into consideration when examining the financial statements of MFIFs. A forthcoming edition of the MicroBanking Bulletin, focusing on the supply side of MFI funding, will provide more details of issues arising from the lack of standardisation and transparency in MFIF reporting. MFIFs that reported having hedging mechanisms in place indicated differences in their degree of hedging: some fully hedged currency risk, while many hedged hard currency risk but not their local currency exposure. The most common reason for not hedging currency risk is that MFIFs are willing to assume the risk. MFIFs that had not hedged their currency exposure are identified in Appendix 5. Other MFIFs that were not hedging simply because they did not face direct currency risk are listed in Appendix 6. Some MFIFs also chose to bear the FX risk and not hedge, in order not to increase the costs of their loans and face the risk of losing potential customers.Appendix 3 indicates that a few investment funds, primarily social funds, are willing to assume direct currency risk by offering local currency loans to MFIs. However, most MFIFs invest in MFIs in hard currency, passing the FX risk to the MFIs, which then bear the responsibility for hedging by obtaining a hard currency guarantee or buying a derivative security that neutralises their risk. A number ofMFIFs are lending in hard currencies, sometimes recklessly, in countries where the devaluation risk is high and MFIs do not hedge. Similar to the MFIFs, MFIs face varying levels of risk that depend not only on the mix of currencies they borrow and on-lend to their clients, but also on the volume of funds borrowed and/or on-lent in different currencies.A recent survey conducted by CGAP and The MIX identified the funding structure and future funding projections of MFIs.Of the 216 MFIs that responded to the survey, 80 indicated that they were currently using hard currency funding (USD or EUR) and indicated the amount.Of these 80 MFIs, 8 operated in dollarised economies (Ecuador and El Salvador) or in Euros (Kosovo). The remaining 72 were exposed to either USD or EUR currency risk: 61 had an average exposure of USD 2.6 million and 11 had an average exposure of EUR 3.8 million.An average of 48% of USD loans and an average of 36% of EUR loans were hedged. Nevertheless, these averages hide important differences in hedging practices amongst MFIs. More interesting is the distribution of hedging (Table 4).In either USD or EUR exposures, 72 MFIs should have hedged: 54% were not hedging at all, while 24% were fully hedged. The remaining 16 MFIs (or 22%) partially hedged their currency risk. For more details on exposures and the percentage of hedging by the MFIs in the survey that were operating in a non-USD or non-EUR country, see Appendices 9, 10 and11.Most of the 216 surveyed MFIs had some exposure to currency risk through their transactions with an average of one foreign lender, and/or desired to increase their funding from foreign sources. In addition, 68 (or 31%) of the 216 MFIs surveyed indicated that foreign funders did not want to assume foreign exchange risk and that this was a challenge in obtaining foreign loans and equity. In addition, the sample results suggest that there is a high probability that MFIs that have access to foreign loans are not hedging properly. The hedging issue is therefore important: helping MFIs reduce currency risk will increase their interest in obtaining foreign lending and reducing FX losses.Similar to the MFIFs, the performance of MFIs is affected not only by theactual gains or losses incurred from foreign exchange, but also in the way these are accounted for. Adjustment methods used by external analysts such as rating agencies also contain considerable differences. It is important to examine the specific accounting treatments when comparing the performance of MFIs.Although FX risk occurs in almost every transaction between microfinance investors (especially foreign investors) and MFIs, too many MFIFs and MFIs are not hedging appropriately. Hedging is seldom used because common hedging mechanisms are not available in the countries where MFIs operate, or prohibitively costly for the small amounts of the transactions involved. While hedging increases transaction costs, lack of hedging results in losses that can be significant, especially for MFIs and MFIFs that do not have well diversified portfolios.In addition, MFIFs often compensate for FX risk by increasing their interest rates to MFIs to cover potential losses. FX risk therefore increases the lending costs for the MFIs (and ultimately, for their clients), regardless of whether or not they have access to local currency loans. Unless MFIFs are able to assume more of the FX risk linked to their lending to MFIs, other funding instruments such as guarantees may be more appropriate for MFIs that face small margins.“Best practices”for hedging by MFIFs should include strategies of when to hedge, how much to hedge, how to hedge. Sharing experiences with successful and innovative hedging mechanisms, such as FX insurance funds, would greatly encourage MFIFs to absorb more of the FX risk that MFIs are so ill equipped to address, reducing costs for MFIFs and MFIs.译文：小额贷款机构外汇风险管理和小额信贷投资基金术语“多边投资框架”在这一章中使用广泛，包括机构（一般金额小于人均国民生产总值250％）提供的小规模金融服务，如贷款，储蓄，保险，汇款和其他服务。

银行小额信贷风险管理研究国内外文献综述及理论基础目录银行小额信贷风险管理研究国内外文献综述 (1)S.1国外文献综述 (1)(1)小额信贷的产生及发展 (1)(2)国外小额信贷风险研究 (2)(3)国外小额信贷风险管理现状 (2)S.2国内文献综述 (3)(1)国内小额信贷业务的发展 (3)(2)我国小额信贷业务风险管控 (3)第2章小额信贷风险相关概念与理论基础 (4)2.1小额信贷风险管理的的定义 (4)2.2小额信贷风险的类型 (4)2.3小额信贷风险的成因 (5)参考文献 (5)S.1国外文献综述(1)小额信贷的产生及发展1960年，小额信贷便开始产生，1990年该行业得到推动。

国际上针对"小额信贷"有两个对应的词进行解释，一个是Microfmance，另一个是Microcredit。

如今小额贷款具有单笔贷款规模小与纯信用发放的特点。

现代的小额信贷其最早是出现在孟加拉国乡村银行，其主要的目的就是为了针对贫困农民予以一定的信贷方面的帮助，体现出良好的扶贫作用。

上世纪70年代末，孟加拉学者穆罕默德.尤努斯指出，农民普遍无法提供有效抵押品，单个农民贷款规模小且分散，这些原因增高了涉农贷款的业务成本，因此传统金融机构往往不愿意为农民提供贷款。

于是，他在向贫困妇女借款的基础上开办了"穷人自己的银行"—格莱珉银行，数据显示，2007年，格莱珉银行为741万贫困者提供了帮助，其小额信贷业务覆盖了八万多个村庄，分支机构多达两千多家。

2006年，为了表彰尤努斯和格莱珉银行帮助社会贫困人口发展与经济进步所作出的贡献，两人全票通过获得了诺贝尔和平奖。

紧接着，小额信贷机构在世界各地蔓延，乡村银行广泛推广并获得巨大成功。

依据2012年的数据，2010年获得小额贷款的困难家庭为S75亿户，相比1997年的760万户，大约扩大了18倍。

同时，世界各地出现了许多小额信贷成功典例，玻利维亚阳光银行、孟加拉乡村银行、印尼人民银行等，这些成功范例为世界范围内小额信贷发展产生了一定的指导作用，尤其是对发展中国家而言。

商业银行信贷风险管理外文文献翻译中文3000多字This article discusses the importance of credit risk management for commercial banks。

It highlights the us methods used by banks to manage credit risk。

including credit scoring。

credit limits。

loan loss ns。

and collateral requirements。

The article also examines the impact of regulatory requirements on credit risk management practices and the role of corporate governance in ensuring effective risk management。

Overall。

the article emphasizes the need for banks to adopt a comprehensive and proactive approach to credit risk management in order to maintain financial stability and avoid costly losses.In today's increasingly complex financial environment。

effective credit risk management is essential for the long-term success of commercial banks。

Banks face numerous challenges in managing credit risk。

商业银行风险管理中英文对照外文翻译文献(文档含英文原文和中文翻译)“RISK MANAGEMENT IN COMMERCIAL BANKS”(A CASE STUDY OF PUBLIC AND PRIVATE SECTOR BANKS) - ABSTRACT ONLY1. PREAMBLE:1.1 Risk Management:The future of banking will undoubtedly rest on risk management dynamics. Only those banks that have efficient risk management system will survive in the market in the long run. The effective management of credit risk is a critical component of comprehensive risk management essential for long-term success of a banking institution. Credit risk is the oldest and biggest risk that bank, by virtue of its very nature of business, inherits. This has however, acquired a greater significance in the recent past for various reasons. Foremost among them is the wind of economic liberalization that is blowing across the globe. India is no exception to this swing towards market driven economy. Competition from within and outside the country has intensified. This has resulted in multiplicity of risks both in number and volume resulting in volatile markets. A precursor to successful management of credit risk is a clear understanding about risks involved in lending, quantifications of risks within each item of the portfolio and reaching a conclusion as to the likely composite credit risk profile of a bank.The corner stone of credit risk management is the establishment of a framework that defines corporate priorities, loan approval process, credit risk rating system, risk-adjusted pricing system, loan-review mechanism and comprehensive reporting system.1.2 Significance of the study:The fundamental business of lending has brought trouble to individual banks and entire banking system. It is, therefore, imperative that the banks are adequate systems for credit assessment of individual projects and evaluating risk associated therewith as well as the industry as a whole. Generally, Banks in India evaluate a proposal through the traditional tools of project financing, computing maximum permissible limits, assessing management capabilities and prescribing a ceiling for an industry exposure. As banks move in to a new high powered world of financial operations and trading, with new risks, the need is felt for more sophisticated and versatile instruments for risk assessment, monitoring and controlling risk exposures. It is, therefore, time that banks managements equip themselves fully to grapple with the demands of creating tools and systems capable of assessing, monitoring and controlling risk exposures in a more scientific manner.Credit Risk, that is, default by the borrower to repay lent money, remains the most important risk to manage till date. The predominance of credit risk is even reflected in the composition of economic capital, which banks are required to keep a side for protection against various risks. According to one estimate, Credit Risk takes about 70% and 30%remaining is shared between the other two primary risks, namely Market risk (change in the market price and operational risk i.e., failure of internal controls, etc.). Quality borrowers (Tier-I borrowers) were able to access the capital market directly without going through the debt route. Hence, the credit route is now more open to lesser mortals (Tier-II borrowers).With margin levels going down, banks are unable to absorb the level of loan losses. There has been very little effort to develop a method where risks could be identified and measured. Most of the banks have developed internal rating systems for their borrowers, but there hasbeen very little study to compare such ratings with the final asset classification and also to fine-tune the rating system. Also risks peculiar to each industry are not identified and evaluated openly. Data collection is regular driven. Data on industry-wise, region-wise lending, industry-wise rehabilitated loan, can provide an insight into the future course to be adopted.Better and effective strategic credit risk management process is a better way to Manage portfolio credit risk. The process provides a framework to ensure consistency between strategy and implementation that reduces potential volatility in earnings and maximize shareholders wealth. Beyond and over riding the specifics of risk modeling issues, the challenge is moving towards improved credit risk management lies in addressing banks’readiness and openness to accept change to a more transparent system, to rapidly metamorphosing markets, to more effective and efficient ways of operating and to meet market requirements and increased answerability to stake holders.There is a need for Strategic approach to Credit Risk Management (CRM) in Indian Commercial Banks, particularly in view of;(1) Higher NPAs level in comparison with global benchmark(2) RBI’ s stipulation about dividend distribution by the banks(3) Revised NPAs level and CAR norms(4) New Basel Capital Accord (Basel –II) revolutionAccording to the study conducted by ICRA Limited, the gross NPAs as a proportion of total advances for Indian Banks was 9.40 percent for financial year 2003 and 10.60 percent for financial year 20021. The value of the gross NPAs as ratio for financial year 2003 for the global benchmark banks was as low as 2.26 percent. Net NPAs as a proportion of net advances of Indian banks was 4.33 percent for financial year 2003 and 5.39 percent for financial year 2002. As against this, the value of net NPAs ratio for financial year 2003 for the global benchmark banks was 0.37 percent. Further, it was found that, the total advances of the banking sector to the commercial and agricultural sectors stood at Rs.8,00,000 crore. Of this, Rs.75,000 crore, or 9.40 percent of the total advances is bad and doubtful debt. The size of the NPAs portfolio in the Indian banking industry is close to Rs.1,00,000 crore which is around 6 percent of India’ s GDP2.The RBI has recently announced that the banks should not pay dividends at more than 33.33 percent of their net profit. It has further provided that the banks having NPA levels less than 3 percent and having Capital Adequacy Reserve Ratio (CARR) of more than 11 percent for the last two years will only be eligible to declare dividends without the permission from RBI3. This step is for strengthening the balance sheet of all the banks in the country. The banks should provide sufficient provisions from their profits so as to bring down the net NPAs level to 3 percent of their advances.NPAs are the primary indicators of credit risk. Capital Adequacy Ratio (CAR) is another measure of credit risk. CAR is supposed to act as a buffer against credit loss, which isset at 9 percent under the RBI stipulation4. With a view to moving towards International best practices and to ensure greater transparency, it has been decided to adopt the ’ 90 days’ ‘ over due’ norm for identification of NPAs from the year ending March 31, 2004.The New Basel Capital Accord is scheduled to be implemented by the end of 2006. All the banking supervisors may have to join the Accord. Even the domestic banks in addition to internationally active banks may have to conform to the Accord principles in the coming decades. The RBI as the regulator of the Indian banking industry has shown keen interest in strengthening the system, and the individual banks have responded in good measure in orienting themselves towards global best practices.1.3 Credit Risk Management(CRM) dynamics:The world over, credit risk has proved to be the most critical of all risks faced by a banking institution. A study of bank failures in New England found that, of the 62 banks in existence before 1984, which failed from 1989 to 1992, in 58 cases it was observed that loans and advances were not being repaid in time 5 . This signifies the role of credit risk management and therefore it forms the basis of present research analysis.Researchers and risk management practitioners have constantly tried to improve on current techniques and in recent years, enormous strides have been made in the art and science of credit risk measurement and management6. Much of the progress in this field has resulted form the limitations of traditional approaches to credit risk management and with the current Bank for International Settlement’ (BIS) regulatory model. Even in banks which regularly fine-tune credit policies and streamline credit processes, it is a real challenge for credit risk managers to correctly identify pockets of risk concentration, quantify extent of risk carried, identify opportunities for diversification and balance the risk-return trade-off in their credit portfolio.The two distinct dimensions of credit risk management can readily be identified as preventive measures and curative measures. Preventive measures include risk assessment, risk measurement and risk pricing, early warning system to pick early signals of future defaults and better credit portfolio diversification. The curative measures, on the other hand, aim at minimizing post-sanction loan losses through such steps as securitization, derivative trading, risk sharing, legal enforcement etc. It is widely believed that an ounce of prevention is worth a pound of cure. Therefore, the focus of the study is on preventive measures in tune with the norms prescribed by New Basel Capital Accord.The study also intends to throw some light on the two most significant developments impacting the fundamentals of credit risk management practices of banking industry – New Basel Capital Accord and Risk Based Supervision. Apart from highlighting the salient features of credit risk management prescriptions under New Basel Accord, attempts are made to codify the response of Indian banking professionals to various proposals under the accord. Similarly, RBI proposed Risk Based Supervision (RBS) is examined to capture its direction and implementation problems。