Credit Risk – Creating System of Credit Risk Management in Changing Economic Conditions in Macedonian Banks

AbstractCredit risk policy is one of the most important instruments of economic policy. Experiences from developed countries and countries in transition show that the optimal credit risk policy is an essential prerequisite for accelerating economic development. The effectiveness of the mechanism in achieving this goal involves the fulfilment of certain conditions: stabilization of prices and elimination of price disparities, coordination of movements of exchange rates, inflation and interest rates, etc. In countries with a diversified financial structure, achieving these prerequisites, as well as the formation of interest rates on the balanced value is realized through the action of the market mechanism. Given that most of these issues are present in Macedonia, it is necessary to identify and critically re-assess the effects of credit risk policy on economic developments, as well as preventive measures to reduce risk11Brown C. Keith, Reilly K. Frank: Investment portfolio Analysis and Portfolio Management, Thomson South Western, 2004, pp 243. While financial institutions have faced difficulties over the years for a multitude of reasons, the major cause of serious banking problems continues to be directly related to 1ax credit standards for borrowers and counterparties, portfolio risk management, or a lack of attention to changes in economic or other circumstances that can lead to a deterioration in the credit standing of a bank's counter counterparties. The aim of the paper is to give a view of the concentration of the financial system, credit risk to which are exposed Macedonian banks as well as measures that are to be taken preventively in order to influence the reduction of credit risk