PRESS

• Agencies Issue Credit Risk Management Guidance for Home Equity Lending The federal bank, thrift, and credit union regulatory agencies today issued guidance that promotes sound risk management practices for home equity lines of credit and loans. The agencies have found that in some cases credit risk management practices for home equity lending have not kept pace with the product's rapid growth and eased underwriting standards. < more >

•  Credit Risk Management Guidance - The rise in home values coupled with low interest rates and favorable tax treatment has made home equity loans and lines attractive to consumers. To date, delinquency and loss rates for home equity loans and lines have been low, due at least in part to the modest repayment requirements and relaxed structures that are characteristic of much of this lending. The risk factors listed below, combined with an inherent vulnerability to rising interest rates, suggest that financial institutions may not be fully recognizing the risk embedded in these portfolios. Specific product, risk management, and underwriting risk factors and trends that have attracted scrutiny are: < more >

• Credit risk transfer by EU banks: activities, risks and risk management - The European Central Bank (ECB) is today publishing a report on the credit risk transfer (CRT) activities of EU banks. The report was prepared by the Banking Supervision Committee (BSC) of the European System of Central Banks, which comprises of representatives from the ECB and the national central banks and banking supervisory authorities of the EU < more >

·        Basel Committee issues guidance on Credit Risk Management and Disclosure - The Basel Committee on Banking Supervision today issued a revised version of its guidance on credit risk management and disclosure. The paper Principles for the Management of Credit Risk specifically addresses the following areas: (i) establishing an appropriate credit risk environment; (ii) operating under a sound credit-granting process; (iii) maintaining an appropriate credit administration, measurement and monitoring process; and (iv) ensuring adequate controls over credit risk. The paper Best Practices for Credit Risk Disclosure aims to promote adequate and effective transparency of banks' credit risk profiles by providing guidance to banks on useful credit risk disclosures and discussing supervisory information needs with respect to credit risk in banks. The guidance covers credit risk in all types of banking activities, including lending, trading, investments, liquidity/funding management and asset management. < more >