Abstract

Uncontrolled wish for even larger profits led to neglecting the significance of credit risk, and later on to bankruptcy of American mortgage banks that significantly initiated the world economy crises. If credit risk manifested itself in a relatively stable economy such as American, it is not hard to draw a conclusion how important is quality credit risk managing in economies in transition, which are fragile and unpredictable. Economies in transition are characterized by powerful economic, debtor-creditor, and credit expansion. Serbian economy as an example shows that even traditionally rigid banks did not manage to resist the negative impact of great credit risk while the economy felt drastically this negativity through system illiquidity, blocked accounts and ceasing of business systems. All that in transiting economies manifested as positive, with generation of economic crises demonstrated as a serious negativity. Economy sponsors in transitions who “manad” economic prosperity (foreign investors), in conditions of crises turned to their own problems while the sponsored economies were left weak to preserve themselves from recession. The oncoming period will be, obviously, a period of general rigidity of economic system since it is hardly believable that anybody will afford the luxury of un-inspecting debtor – creditor relations without quality obligations; this referrers to both micro and macro economic levels where state economies should maintain a highly restrictive monetary policy.

Key words: Credit, risk, crises.