Importance of Credit Risk and Its Connection with Other Risk Factors

The article presents a study which aims to analyze the role of credit risk in banking industry. Nowadays the credit risk is still the most important risk in banking. In recent years, many banks have built new businesses – in particular trading operations and services – that generate fees and interest payments. Although banks’ incomes are less dependent from the performance of the loan portfolio, this type of credit risk – loan risk – is still very important. Badly priced loans can damage banks’ capital base seriously. The new traded instruments related from of credit risk – counterparty risk- can create losses as well.