Credit Risk Management: A Practical Examination of Turk Eximbank

Abstract

International trade has emerged as an important component of the developing economies of the world. In this setting, by supporting exports, export credit agencies play a unique role, as they complement the role of commercial banks as important financial institutions. At the same time, credit risk management is emerging as one of the main areas of competitive edge, and as an area that regulatory bodies consider crucial. We examine the credit risk management practices of Turk Eximbank, the official Turkish export credit agency, and also compare it with Export Development Canada, its counterpart in Canada. We find that Turk Eximbank’s practices conform to the current requirements of the Turkish bank regulatory body, but also that there is room for improvement.