38. Credit risk policies and procedures should specify: a. policies and procedures and rules for …

Credit risk policies and procedures should specify:

• a. policies and procedures and rules for the approval of credit granting and decision-making, including appropriate authorisation levels set in accordance with the credit risk appetite and limits;
• b. credit-granting criteria, taking into account the items referred to in Annex 1;
• c. requirements for the handling of information and data needed for the creditworthiness assessment, as set out in Section 5.1;
• d. requirements for the creditworthiness assessment, including a sensitivity analysis, as referred to in Section 5.2;
• e. requirements for exposure aggregation and credit risk limits and the management of credit risk concentrations;
• f. requirements and procedures regarding the acceptance and use of collateral and credit risk mitigation measures, to determine their effectiveness in minimising the inherent risk of a credit facility — such requirements and procedures should be asset class-specific and product type-specific and should duly consider the type, size and complexity of the credit facilities being granted;
• g. conditions for the application of automated decision-making in the credit-granting process, including identifying products, segments and limits for which automated decision-making is allowed;
• h. a risk-based approach, addressing possible deviations from standard credit policies and procedures and credit-granting criteria, including:
• i. conditions defining the approval process for deviations and exceptions and the specific documentation requirements, including the audit trail;
• ii. criteria for rejections and criteria for the escalation of deviations/exceptions to higher levels of the decision-making authority (including overrides, overrules, exposures possibly approved as an exception to general lending standards and other non-standard business under a special process with different approval authorities);
• iii. requirements for the monitoring of circumstances and conditions for an exceptional credit-granting decision, including requirements for their review by the relevant functions during the regular review of the application and compliance with policies and limits;
• i. requirements relating to what is to be documented and recorded as part of the credit-granting process, including for sampling and audit purposes — this should include, at a minimum, the requirements for the completion of credit applications, the qualitative and quantitative rationale/analysis, and all supportive documentation that served as a basis for approving or declining the credit facility;
• j. requirements for monitoring credit-granting activities — the internal control framework should ensure that it covers all phases after the granting of credit;
• k. where applicable, the criteria as set out in Sections 4.3.2, 4.3.3, 4.3.4, 4.3.5 and 4.3.6;
• l. criteria as set out in Section 4.3.1 and 4.3.7.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA -

  EN: Guidelines and other publications of the European Banking Authority (EBA), https://www.eba.europa.eu/. © European Banking Authority. Reproduction is authorised provided the source is acknowledged (EBA legal notice). Divided into sections and converted into the GRCA format, the wording unchanged. Only the versions published by the EBA are authoritative.

  DE: Leitlinien und weitere Veröffentlichungen der Europäischen Bankenaufsichtsbehörde (EBA), https://www.eba.europa.eu/. © European Banking Authority. Wiedergabe mit Quellenangabe gestattet (Rechtlicher Hinweis der EBA). In Abschnitte aufgeteilt und in das GRCA-Format umgewandelt, der Wortlaut unverändert. Maßgeblich sind allein die von der EBA veröffentlichten Fassungen.