He basic types of banking risks

The risk is one of the most important concepts of commercial activity. However concerning the concepts of risk exists are many misconceptions associated with the lack of understanding of the nature of their occurrence. In the minds of top management is often leads to the denial of the possibility of risk measurement, and management of risks is equated with art. There are many opinions on the issue species diversity of banking risks, which are based on the interpretation of risk: how any deviation from the intended result.

Excessive theorizing, borrowed from the stock market, and detail inherent in Russian literature, as a rule, do not confer clarity, so necessary for the bank management. It is known that science begins with classification. First of all, when the theory of banking risks was still at the development stage, a detailed approach was justified. Now this only leads to confusion or the sleight.

The general attitude of the Basel Committee to the classification of the basic types of risks (credit, market, operational) seems the most correct. However is reasonable to assume about the necessity still introducing the concept of "type of risk". The typology of risk is a combination of liquidity and profitability. The "golden rule" of financial management reads as follows: the higher the rate of return, the lower the liquidity.

Banks are subject to various potential risks, the main ones being: credit, operational and market risks. The basic types of risk are the risk of yield and liquidity risk.

Classification of risks is under the influence these two criteria for assessing so as classification - is a hierarchical system of interrelated elements, groups and subgroups, allowing to create a slender picture a unified whole with allocation of its constituent parts.

Credit risk - the risk failure to comply by the party that received the loan, the terms of loan agreement, leading to defaults and lost profits for the bank.

Operational risk - the risk connected with internal processes in the bank, which lead to human errors.

Market risk - the risk of unfavorable fluctuations of prices on goods and services both in domestic and on the international markets.

The risk of return (financial risk) - the risk of direct financial losses, of yield decrease or profits arising in of banking transactions in relation to high degree of uncertainty in the results of the credit institution influenced by a plurality of external and internal factors.

Liquidity risk - the risk of loss of solvency, arising from the reduction in the permissible level of liquid assets (lack of funds on the account of the bank, its cash department) or the loss of liquidity of working assets (depreciation of securities, the existence of overdue debt) in a limited capabilities for interbank borrowing.

There are other criteria of classification of banking risks, which reflect the different categories (subspecies) within the structure of the basic types of risk. For example, market risks include: interest risk, currency risk, risk changes in value of securities and operating takes into account legal risk.

Often are distinguished external and internal risks and produce a strategic risk. Sometimes it given by a list of them.

For example, the Bank of Russia identified the following "typical banking risks":

• -    Credit;

• -    Market, stock, currency, interest risk;

• -    Operational;

• -    Liquidity risks;

• -    Legal, regional.

The combination of the kind and type of risk is the basis of their classification, which may be more or less unfolded.

Reasonable risk management characterizes the actions of the bank as a desire to maximize profits at a certain fixed level of risk, expressing assurance that the profit of the bank is below a certain acceptable level.

Serious analysis can identify many more additional differences and methodological features which are the subject of scientific debate and practical borrowing "best practices".

Thus it is important to know that they are based on difficulties of uniting the in a single system of different types of risk, which, in fact, are of two types: liquidity risk and profitability.

Conclusions: Thus, we can say to the banking business, there are two basic types of financial risk: the risk of yield and liquidity risk, and three kinds of typical risks of the credit institution:

• -    credit;

• -    operating;

• -    market risk;

that are linked to an internal error in the selection and implementation of the strategy and external: political and market factors.