BANK 5.2.2 Policies — concentration risk sources and limits

(1) A banking business firm’s concentration risk policy must set limits for acceptable concentrations of risk, consistent with the firm’s risk tolerance, risk profile and capital. The limits must be made known to, and must be understood by, all relevant staff.
(2) The policy must ensure that:
(a) the firm’s information systems identify exposures creating risk concentrations and large exposures to single counterparties or connected counterparties, aggregate those exposures and facilitate their management; and
(b) all significant such concentrations and exposures are reviewed regularly and reported to the firm’s governing body or senior management.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).