VARIOUS APPROACHES TO PROVIDING PORTFOLIO RESERVES OF HOMOGENEOUS LOANS TO INDIVIDUALS
The paper deals with provision for possible portfolio loan losses and states that it is among the most pressing issues of bank management. The paper examines the essence of portfolio reserves, systematizes regulatory requirements for providingreserve for homogeneous loan losses, givesa detailed description of methodological approaches to loan losses reserves used by Russian banks. It is proved that the choice of methods of creating portfolio reserves is determined by the characteristics of the bank, namely, value of bank equity which categorizes the portfolio of borrowers and minimum amount of loans combined into portfolios, accumulated statistics on problem loans, bank's focus on service of a certain segment of borrowers, economic and statistical tools used to model losses probability, and other factors.