Credit Risk

The non-payment or delayed payment of deposits, funds directed loans causes credit risk. The uncertainites of Turkey‟s economy due to high inflation increase the interest burden of banks and has the effect of making difficult the collection of receivables. The credit risk according to the contractual time and situations is the risk which is arising from being unable to meet its obligations of the participants. This condition causes financial loss. The formation of risk of the participant explain bu using the positive market values of instruments in the portfolio of the participant at any time. In this formation can be calculated based on source for each vehicle in the portfolio (Alan 1997, pp.697). The credit risk depending on the face of a credit event can be defined as potential loss in the market value. The risk of credit arises in the case of a change effort to fulfill obligations of one of the parties. Thus, the credit ratings in the market value of debt may be seen as a credit risk depending on the percentage of faults of market. Among the credit risk or market risk is created some kind of overlap

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