BANK 5.3.2 Policies — large exposures

A banking business firm’s large exposure policy must include:

(a) exposure limits, commensurate with the firm’s risk tolerance, risk profile and capital, for:
(i) categories of counterparties (for example, sovereigns, other authorised firms and other financial entities, corporate and individual borrowers);
(ii) connected counterparties;
(iii) particular industries or sectors;
(iv) particular countries; and
(v) asset classes (for example, property holdings);
(b) the circumstances in which the exposure limits may be exceeded;
(c) the procedures for approving exceptions to, and deviations from, exposure limits or policies; and
(d) the procedures for identifying, measuring, managing and reporting large exposures.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).