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Project Lending in Banking Risk Management

Author

Listed:
  • Yury Yuryevich Rusanov
  • Natalia Nikolaevna Natocheeva
  • Tatiana Viktorovna Belyanchikova
  • Gulmira Sultanovna Bektenova

Abstract

The article presents a number of concepts of contemporary risk management theory and methodology. The general concept of risk is structured into two successive aspects: factorial and productive. Except of the broadest approach to the definition of risk as having in its manifestation only negative consequences (losses), i.e. "pure risk", the authors define also "odds", "chance risks (speculative risks)", and "shocks". It is shown that in project lending (funding), credit, reputational, and deposit pure banking risks can be significantly reduced, while corresponding odds can increase. This is due to the fact that cash flow management of the project is carried out by bank employees or working groups under their leadership, whose competence and professional behavior will support the bank's reputation and will allow immediately and timely providing a return of funds invested in the project. The authors describe techniques and tools to minimize and compensate banking risks, as well as peculiarities of their application in project lending (funding).

Suggested Citation

  • Yury Yuryevich Rusanov & Natalia Nikolaevna Natocheeva & Tatiana Viktorovna Belyanchikova & Gulmira Sultanovna Bektenova, 2017. "Project Lending in Banking Risk Management," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 453-471.
    • Handle: RePEc:ers:journl:v:xx:y:2017:i:3b:p:453-471
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    File URL: http://ersj.eu/dmdocuments/2017-xx-4-b-34.pdf
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    References listed on IDEAS

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    Cited by:

    1. Syed Alamdar Ali Shah, 2019. "Integration Of Financial Risks With Non Financial Risks: An Exploratory Study From Pakistani Context," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(2), pages 49-65.

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    More about this item

    Keywords

    commercial bank; project funding; factorial risk area; risk management; methods and tools for preliminary orientation; reputational risk; project author and implementer. JEL Classification: G21; G24; G32.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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