Early warning systems and observation of bad debts in the credit risk managements

Observation of bad debt and early warning systems in the creditrisk managements, are the major factors playing role in enhancing theefficiency of the works for improvement asset quality of banks which are thecore of financial systems. Early warning systems are related to determinationof possible credit problems; however observation of bad debt is, related todetermination of causes and sources of the problems. Exclusion of processescovering these factors, their ineffective formation, inadequate attention totheir application prevent banks to get the solutions in time against the baddebts. This situation builds the most important source of impairing assetquality which is the major reason that makes banks to undergo troubles.Because of this, banks facing countless risks and infinite competition aredependent on being managed well risk wise in order to continue activitiessoundly in the fast changes processes. In this context, application of riskmanagement structural formations is of vital importance for our bankingsector which is at the crawling stage yet in this issue. Therefore theframework of the structure which covers issues like methods and processesthat will ensure a strong risk management and risk determination and earlywarning model is devised, information is provided that will be theinfrastructure to understanding thereof and their improvement, and somemeasures are envisaged by review of early warning systems and problemcredits observation processes.Key Words: 1) Banks 2) Credits 3) Risk Management 4) Risk Modelling 5) Risk