INMA S1.4.2 Concentration risk
(1) Concentration risk is the risk of loss resulting from:
(a) large exposures to a single counterparty, market or geographical area; or
(b) exposures to large or one-off transactions.
(2) If an INMA firm is likely to be exposed to concentration risk, its risk management policy should include processes and procedures for identifying, assessing, managing and mitigating that risk. The policy may set out limits for credit exposures, at individual and consolidated levels, to:
(a) single counterparties and groups of related counterparties;
(b) subsidiaries and related entities;
(c) single industries or markets; and
(d) single regions.
|Derived from QFCRA RM/2014-4 (as from 1st January 2015).|