Regulators Advice Banks On Credit Risk

Large banks have received regulatory guidance regarding counterparty credit risk management.

Large banks have received regulatory guidance regarding counterparty credit risk management, Bloomberg reports. Banking regulators, including the Federal Reserve and the Federal Deposit Insurance Corporation, have suggested putting adequate controls and measurement systems. The regulators have indicated the shortcomings in the ability of banks to determine exposures in a timely way and the poor selection of counterparty credit risk metrics. The financial crisis disclosed the flaws in the counterparty credit risk management uneven across business lines and counterparty types.

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