BANK 4.1.1 Introduction

(1) This Chapter sets out the requirements for a banking business firm’s credit risk management policy (including credit risk assessments and the use of ratings from ECRAs) to implement the risk-based framework for capital adequacy and the early identification and management of problem assets.
(2) This Chapter also deals with the following means to determine regulatory capital and control or mitigate credit risk:
(a) the risk-weighted assets approach;
(b) CRM techniques;
(c) provisioning.
(3) To guard against abuses and to address conflicts of interest, this Chapter requires transactions with related parties to be at arm’s length.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).