2.1

The Board must approve and regularly review the LFI’s Credit Risk management strategy and significant policies and processes for the identification, measurement, evaluation, monitoring, reporting, control and mitigation of Credit Risk, including Counterparty Credit Risk, in a manner that is consistent with the Board-approved Risk Appetite.
 

2.2

Branches of foreign banks must comply with this regulation. Where this regulation refers to the Board of the LFI, branches of foreign banks may apply the requirement either with respect to the Board of their head office or with respect to the Senior Management of their head office, which has the oversight of the foreign branch. The Central Bank may, at its discretion, require that all or some of the requirements are met with respect to the Board of the head office.
 

2.3

The Board must ensure that the Risk Governance Framework is appropriate to the Risk Profile, nature, size and complexity of the LFI's business and structure. This includes a proactive and forward-looking oversight of the management of people, policies, processes, procedures and systems to identify, measure, monitor, report, control and mitigate Credit Risk on a timely basis, covering all exposures.
 

2.4

The Board must oversee management to ensure that the Credit Risk management strategy and governance is effectively implemented and fully integrated into the LFI’s overall risk management process.
 

2.5

The Board must ensure that the Risk Governance Framework includes a delegation matrix that articulates the roles and responsibilities for the approval of Credit Facilities, whereby facilities that are material, particularly risky or not aligned with the LFI’s core activities must be approved by the Board.
 

2.6

The Board must ensure that the LFI has policies for the classification of exposures, the determination of provisions and for the management of problem exposures and write-offs. These policies must be approved and regularly reviewed by the Board, and the Board must oversee management to ensure that these policies are effectively implemented.
 

2.7

The Board must ensure that it obtains information and reporting with sufficient detail on the LFI’s Credit Risk at an appropriate frequency throughout the year.
 

2.8

The Board must ensure that credit decisions are made free of conflicts of interest and on an arm’s length basis.
 

2.9

The Board remains ultimately accountable for the appropriate management of Credit Risk, notwithstanding specific responsibilities delegated to Senior Management.