Credit Risk Framework™
Manage the risk of counterparty default and concentration across the credit portfolio.
Credit risk is the risk that counterparties fail to meet obligations, eroding earnings and capital. This framework governs credit through policy, limits, rating, concentration management and provisioning.
Credit losses and concentrations build up unnoticed when exposures are not rated, limited and monitored against a defined appetite.
Manage the risk of counterparty default and concentration across the credit portfolio.
- CFOs
- Credit & risk teams
- Financial institutions
- Credit committees
- Credit policy & appetite
- Counterparty assessment & rating
- Limits & concentration
- Provisioning / ECL
- Collections & recovery
- Portfolio monitoring
- The credit/risk function owns; a Credit Committee approves exposures; the Risk Committee oversees concentration and provisioning.
Fragile
Maturity level 1 of the shared Outliers risk spine — Fragile.
Functional
Maturity level 2 of the shared Outliers risk spine — Functional.
Disciplined
Maturity level 3 of the shared Outliers risk spine — Disciplined.
Strategic
Maturity level 4 of the shared Outliers risk spine — Strategic.
Resilient
Maturity level 5 of the shared Outliers risk spine — Resilient.
- Set credit policy and appetite
- Implement counterparty rating
- Establish limits and concentration controls
- Build provisioning/ECL
- Monitor the portfolio and recover
- Credit policy
- Limit framework
- Concentration tracker
- Portfolio dashboard
- Credit policy
- Limit & concentration policy
- Provisioning / ECL policy
- Largest counterparty %
- Sector concentration
- NPL / past-due ratio
- ECL coverage
- What is our largest single and sector concentration?
- How is the credit portfolio trending?
- Are provisions adequate for the risk?
- How effective is collection and recovery?
Related across the Risk Centre
Financial Risk Assessment™
Assess liquidity, credit, market and capital risk.
Risk Excellence Certification™
Applied, board-ready credential proven by running Outliers frameworks on a real organisation.
Outliers Risk Advisory
Senior risk advisory across the Outliers framework set.
Across the ecosystem
Knowledge graph · 3 relations