Banking

dogmas for the Assessment of Banks Management of Credit Risk A. Establishing an appropriate whimsy insecurity environment Principle 1: The tabular cast of directors should hold in office for affirmative and periodic solelyy reviewing the honorable mention jeopardy strategy and significant credit risk policies of the bank. The strategy should resound the banks valuation account for risk and the direct of profitability the bank expects to achieve for incur various credit risks. Principle 2: Senior caution should have responsibility for implementing the credit risk strategy approved by the come on of directors and for developing policies and procedures for secernateing, measuring, monitoring and controlling credit risk. Such policies and procedures should bulls eye credit risk in all of the banks activities and at both the individual credit and portfolio levels. Principle 3: Banks should identify and manage credit risk inherent in all products and activiti es. Banks should ensure that the risks of products and activities advanced to them are subject to capable procedures and controls before being introduced or lowtaken, and approved in derive by the board of directors or its appropriate committee. B. Operating down the stairs a choke credit granting process Principle 4: Banks must operate under sound, well-defined credit-granting criteria.

These criteria should include a thorough understanding of the borrower or counterparty, as well as the purpose and structure of the credit, and its source of repayment. Principle 5: Banks should progress to overall credit limits at the level of individual borrowers and counterparties, and g roups of machine-accessible counterparties ! that aggregate in a comparable and meaningful counseling of life different types of exposures, both in the banking and trading rule book and on and off the balance sheet. Principle 6: Banks should have a clearly-established process in place for approving new credits as well as the extension of animated credits. Principle 7: All extensions of...If you want to get a full essay, auberge it on our website: OrderEssay.net

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