In managing credit risk, one needs to create a system of interconnected and interdependent methods of deliberate action aimed at minimizing risk and uncertainty in crediting$-$related activities. Using the proposed model of credit risk assessment makes it possible to take a differentiated approach to credit risk management.

Credit risk management can be represented as a process consisting of the following stages:

$1\mathrm{.}1\mathrm{.}1$ Risk Factor Identification

$1\mathrm{.}1\mathrm{.}2$ Assessment of the potential consequences of an identified risk factor

$1\mathrm{.}1\mathrm{.}3$ Choice of managerial strategies aimed at counteracting the consequence of a given risk factor.

$1\mathrm{.}1\mathrm{.}4$ Supervision $($monitoring$)$ of the implementation of the chosen strategies aimed at minimising and neutralising the effect of a given risk factor.

At the stage of credit risk identification, the potential risk is assessed in terms of its quantitative and qualitative parameters within the framework of the risk factor analysis adopted by the bank in order to determine the degree of the severity posed by the risk in question.

Adapted: Konovalova, N$.,$ Kristovska, I., and Kudinska, M$.(2016),$ Credit Risk Management in Commercial Banks.

$2\mathrm{.}1$ Critically evaluate the risk management framework as postulated by Hopkins $(2015)$ and comment on its relevance and applicability in any organisation $/$ institution of your choice.