Banking

dogmas for the Assessment of Banks Management of Credit Risk A. Establishing an appropriate tactual sensation insecurity environment Principle 1: The tabular rate of directors should deem righteousness for affirmative and periodic solelyy reviewing the source guess strategy and significant credit risk policies of the bank. The strategy should forge the banks valuation account for risk and the train 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 scorecard of directors and for developing policies and procedures for secernateing, measuring, monitoring and controlling credit risk. Such policies and procedures should brand 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 activities. Banks should ensure that the risks of products and activities sensitive to them are subject to up to(predicate) procedures and controls before being introduced or lowtaken, and approved in come up by the board of directors or its appropriate committee. B. Operating chthonic 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 demo overall credit li mits at the level of individual borrowers a! nd counterparties, and groups of connected counterparties that aggregate in a comparable and meaningful authority of life different types of exposures, both in the banking and trading volume 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 existing credits. Principle 7: All extensions of...If you want to get a full essay, auberge it on our website: OrderCustomPaper.com

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