3. Governance and Risk Management

No: 1651/67

Date(g): 8/9/2019 | Date(h): 9/1/1441

Status: In-Force

i.	The Board of Directors of a bank is ultimately responsible for the oversight of the bank's large exposures and risk concentrations and for approving policies governing large exposures and risk concentrations of the bank.
ii.	A bank is required to have policies and procedures on large exposures and risk concentrations.
iii.	A bank is required to conduct stress testing and scenario analysis of its large exposures and risk concentrations to assess the impact of changes in market conditions and key risk factors (e.g. economic cycles, interest rates, liquidity conditions or other market movements) on its risk profile, capital and earnings.
iv.	A bank is required to have adequate systems and controls in place to identify, measure, monitor and report large exposures and risk concentrations of the bank on a timely basis and large exposures and risk concentrations of the bank are reviewed at least quarterly.
v.	For exposures and counterparties that are excluded from the large exposure limits, a bank must have adequate processes and controls in place to monitor these excluded exposures. The bank is required to consider how the risks arising from these types of exposures are incorporated into its risk management framework, including establishing internal limits and triggers commensurate with its risk appetite.