Impact of credit risk and exchange rate risk on the performance of commercial banks in Albania during the period 2005-2015 - Economicus

by, Sokol Ndoka, Krisdela Kacani

Abstract

This study analyzes the impact of credit risk and exchange rate risk on the performance of Albanian commercial banks banking during the period 2005-2015. Two important variables related to bank profitability (ROE) will be analyzed, such as credit risk and exchange rate risk. Through this analysis, will be studied the impact of each of these variables on the profitability of Albanian banks. Based on the analyze it is expected that credit risk will have
an impact on the performance of commercial banks in opposition to exchange rate risk, which is expected to be a trivial variable. The study is based on an empirical analyze with qualitative and quantitative data. This study will contribute to identifying the factors that affect the profitability of the banking system in Albania and important conclusions will be drawn in how commercial banks should manage these risks more efficiently. The recommendations arising from this work will serve to young researchers in the academic and professional field. The paper also opens a new way of discussing about instruments and risk management in the Albanian banking system. Ultimately, the most important independent variables will be identified and introduced, affecting the profitability of Albanian commercial banks.