Author Archives | Fisnik.Morina

Stress Testing of Credit Risk: Case Based on Loan Portfolio, Capital Adequacy and Non-Performing Loans in Kosovo

Nowadays the financial stability of the banking sector is a very controversial topic especially the assessment of the right quantity of capital that banks must set aside to be protect against various types of risks with which has to do the banking sector, it presents a big challenge. One of techniques that help to bring answer on the question whether a special bank or banking sector has a sufficient capital in case of crisis is a stress testing. So the stress testing analysis represents an important tool of sustainable assessment of the banking sector towards possible shocks on credit portfolio and on liquidity position, which can resulting from unfavorable economic development and changes on market conditions. Stress testing’s of the sensitivity of financial institutions towards macroeconomic shocks are a valuable assistance in the assessment of the economic stability. They allow a predictive analysis and an uniform approach for the identification of potential risks of the banking system in general.

The results of the analysis for stress testing that are made for the banking sector in Kosovo suggest satisfied abilities of this sector to meet unexpected situations of exposure toward possible risks. Although banks are facing with many risks, the credit risk which will be treated in this study aloud a great weigh. This study has intent to determine macroeconomic factors that have impact in quality of loan portfolios. Through the study we would present an analysis of financial situation in connection with the impending level of nonperforming loans, proceedings that are taken to reduce or to keep at sustainable level, also will be evaluated. The vulnerability of the banking sector toward sector risk as much as we have information on the macroeconomic level and to determine the indicators that warning the early worsening in the quality of loan portfolio. Also through stress scenarios we could understand what will happen in different situations with nonperforming loans.

  Stress Testing of Credit Risk: Case Based on Loan Portfolio, Capital Adequacy and Non-Performing Loans in Kosovo (1.5 MiB, 1,909 hits)

Posted in Economics, Information Technology, Knowledge Management, Volume VI, Issue no. 3Comments Off on Stress Testing of Credit Risk: Case Based on Loan Portfolio, Capital Adequacy and Non-Performing Loans in Kosovo

The Impact of the Integrated Financial Risk Management on the Effectiveness of the Decisions of the Financial Leverage: An Empirical Study on the Insurance Companies in Kosovo

Among many decisions taken by business organizations, the most critical decision they take which affects the value of the company is that of the financial leverage. The designing of the decisions in a standard level of the financial leverage can be useful and at the same time harmful for the company. This study introduces a new approach called “Integrated financial risk management” which maximizes the effect of the organizational decisions. The management of the integrated financial risk aims at: improving the financial performance of the company, strengthening the stakeholders` communication and building a greater confidence in the market by providing real time data about the financial risks, decisions and the values of the organization, and finally approving and implementing a common framework about the risk inside the organization.
The process of the integrated financial risk management (IFRM) is designed and established by the company management and is implemented by the staff inside the organization. This is not a linear process; an IFRM may also have an effect on other risks and on control tools which are recognized as effective on the limitation of the risk. In short, this management of the financial risks effects on the efficiency of the financial leverages decisions.
This approach will have an impact on the increase of integration between strategic and operational standards inside and outside the country throughout the managerial hierarchy. In this study we will identify the relationship between the financial leverage and the performance of the insurance companies which are licensed by the Central Bank of Kosovo. This is an econometric study for the period from 2010 until 2014.

  The Impact of the Integrated Financial Risk Management on the Effectiveness of the Decisions of the Financial Leverage: An Empirical Study on the Insurance Companies in Kosovo (727.6 KiB, 1,135 hits)

Posted in Economics, Information Technology, Knowledge Management, Volume VI / 2016, Volume VI, Issue no. 1Comments Off on The Impact of the Integrated Financial Risk Management on the Effectiveness of the Decisions of the Financial Leverage: An Empirical Study on the Insurance Companies in Kosovo