139. Competent authorities should be satisfied that credit institutions have adopted and adhered to …

Competent authorities should be satisfied that credit institutions have adopted and adhered to the sound credit risk practices described in these guidelines. Competent authorities’ evaluation should include, but not be limited to, whether:

• a. the credit institution’s internal credit risk review function is robust and encompasses all lending exposures;
• b. the quality of a credit institution’s processes and systems for identifying, classifying, monitoring and addressing changes in credit risk for all lending exposures in a timely manner is adequate, and management’s experienced credit judgement considers current conditions and forward-looking information, including macroeconomic factors, and is well documented;
• c. the credit institution’s processes reflect the risk appetite of the credit institution in a manner that ensures lending exposures on which credit risk has increased since origination or purchase to a level in excess of the credit institution’s risk appetite are promptly identified and properly monitored, and ECL allowance estimates appropriately reflect the increases in the credit risk of these exposures as increases are identified. Where a credit institution originates or purchases a lending exposure on which credit risk at acquisition exceeds the institution’s risk appetite and which therefore represents an exception to the institution’s lending policies and standards, competent authorities should evaluate whether the institution has established and adheres to appropriate processes and controls for: the initial identification, review, approval and documentation of such exposures; the reporting of such policy exceptions to senior management and, for individually significant exposures, to the management body; and the proper monitoring of such exposures after initial recognition. Competent authorities should also evaluate whether the credit institution’s processes and controls separately identify ECL allowance estimates related to exposures consistent with the credit institution’s risk appetite and those related to riskier lending exposures;
• d. appropriate information about the credit risk of lending exposures, changes in credit risk, the related ECL allowance and changes in allowance estimates is provided to the credit institution’s management body and senior management on a regular (for example, quarterly or, if warranted, more frequent) basis;
• e. forecasts included in credit risk assessments and measurements are not only reasonable and supportable, but are also consistent with forecasts used for other purposes by the credit institution, all of which are made available to competent authorities; and
• f. the credit institution’s policies and procedures for validating the accuracy and consistency of its internal credit risk assessment models are robust.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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