Ejona Duçi
Elfrida Taraku
Enida Istrefi

University “Aleksandër Moisiu” of  Durrës, kampusi i ri universitar, Spitallë, Durres; Albania

DOI: https://doi.org/10.31410/ITEMA.2018.482

2nd International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2018 – Graz, Austria, November 8, 2018, CONFERENCE PROCEEDINGS published by the Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-13-4

Abstract

The focus of this paper is the exposure of banks to various risks, how they affect the bank’s benefits, to what extent, what are the results, what are the theoretically said, and what are the risks to which the banks “scared” the most.

Based on numerous studies carried out by different authors, the risks to which a bank is exposed are classified in macroeconomic risks and in specific risks that arise from bank activity itself.

In this study, we have focused on the three main risks that a bank faces most, namely the interest rate risk, exchange rate risk and credit risk. We have taken into consideration respectively the spread of the interest rate on loans with the deposit interest rate, the euro exchange rate, the dollar exchange rate and the ratio of bad debt provision to total loans to individuals.

For further analysis of these risks and for measuring their impact on a bank, it is reasonable to assume that a bank’s profitability, as a benchmark for bank performance, bank shareholder returns, and a an important indicator of the effect of banking activity on a country’s economy.

On the basis of the linear regression built with the help of the E-views were answered questions raised and on the basis of regression coefficients we have received an answer regarding the extent of the impact of each of the above-mentioned risks in the bank’s ROE, Credins Bank.

Key words

exposure to risk, interest rate risk, exchange rate risk, credit risk, bank.


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