In the activity of a commercial bank risk is inevitable, since at the moment of taking certain decisions full information is often unavailable. Also further developments may not always be accurately predicted. Errors embedded in information and its interpretation may not also be excluded. It means that risk is an inevitable element of banking activity. It must, however, be noted that any actions taken by bank in course of their activity are to reduce such a risk. That is why, interest in banking risk, in particular credit risk, identification and reduction has been rising for several decades.

The essence of risk has been, both in general economic and banking literature, subject to extensive discussions leading, however, to no commonly accepted definition. Therefore, it is worth to take up subsequent, even a modest attempt to systemize and study more thoroughly the theory of banking risk, including, in particular, credit risk. The article presents different definitions of banking risk and its classification. The paper focuses first of all on the essence and different aspects of credit risk, being most frequent risk in a classical banking activity.