THE IMPROVEMENT OF THE RISK MANAGEMENT PROCESS OF A COMMERCIAL BANK IN THE CONTEXT OF INCREASING ITS PROFITABILITY

Author(s): Chugunov V.I.

Rubric: Economy

DOI: 10.21777/2587-554X-2022-1-36-41

Release: 2022-1 (40)

Pages: 36-41

Keywords: commercial bank, risk management, reserve for possible losses, default risk, CDS (Credit Default Swap), net income

Annotation: The article describes the relationship between the level of banking risks and the volume of created mandatory reserves for possible losses for certain types of banking transactions based on the materials of Sberbank PJSC. The author concludes about the negative impact of the created reserves on the amount of net income of a commercial bank. In this regard, practical recommendations for improving risk management based on CDS (Credit Default Swap), used for hedging risks and including both signs of insurance and signs of derivative financial instruments are proposed in the article. The use of CDS will allow to achieve savings on the creation of reserves for possible losses, which will favorably affect the increase in income of the credit institution.

Bibliography: Chugunov V.I. THE IMPROVEMENT OF THE RISK MANAGEMENT PROCESS OF A COMMERCIAL BANK IN THE CONTEXT OF INCREASING ITS PROFITABILITY // Economics and Management. – 2022. – № 1 (40). – С. 36-41. doi: 10.21777/2587-554X-2022-1-36-41