Regulatory Alerts2002-12-20
Circular 34/2002 (BA) - Minimum requirements for the credit business of credit institutions
The German Federal Financial Supervisory Authority (BaFin) issued Circular 34/2002 to establish minimum requirements for credit institutions to limit risks arising from credit business. The circular mandates that management define a credit risk strategy, ensure proper organizational guidelines, and maintain clear separation of functions between front and back offices. It further prescribes standards for loan processing, risk classification, early detection of risks, and the handling of problem loans to ensure robust internal control systems.
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