5.3.1 First line of defence controls

Credit institutions should ensure that the first line of defence is embedded into the procedures and processes of the operational units, mainly the NPE WUs, that actually own and manage the credit institution’s risks in the specific context of NPE workout.

In order to ensure that adequate control mechanisms are implemented, credit institutions should have internal policies in place on the NPE workout framework. The managers of the operational units are responsible for ensuring that these internal policies are implemented, including through their incorporation into IT procedures. Annex 4 to these guidelines sets out key elements of NPE framework-related policies that should be implemented in credit institutions.