Authors
Krioni Olga Valeryevna
Candidate of Technical Sciences, Associate Professor of the Department of Finance and Economic Analysis
Russia, Ufa State Aviation Technical University
yufir@yandex.ru
Abdullina Yulia Firdausovna
undergraduate
Russia, Ufa State Aviation Technical University
Abstract
This article analyzes the relevant theories of incentives and constraints based on the use of an instrument to mitigate credit risk, including collateral, guarantees, offsetting, and credit derivatives. Relevant incentive and constraint theories include principal-agent theory, mechanism design theory, and incentive theory. Incentive restrictions in small business loans are categorized into pre-loan pre-signal check and post-loan moral hazard suppression. The use of these mitigation tools can not only effectively reduce or transfer the credit risk incurred by banks, but also reduce the capital employed in calculating regulatory economic capital.
Keywords
commercial banks, small business, credit risk, incentives and constraints theory, principal-agent theory, mechanism design theory.
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