Risk Management Practices in Asia and their Interface with Insolvency Systems

We all know that the purpose of credit risk management is to ensure that financial institutions extend and monitor credits to borrowers who are, within predefined risk parameters, prepared to and predictably likely to be able to pay them back. In this sense, the intent of a bank’s risk management processes–and here we refer both to the management of credit and operational risk–is to avoid having an unacceptable number of credits that go into insolvency, workout, restructuring, etc. and then to minimise the actual losses.