Regulatory Alerts2024-05-29
Minimum Requirements for Risk Management (MaRisk) - Explanations to Circular 06/2024
The German Federal Financial Supervisory Authority (BaFin) issued the Minimum Requirements for Risk Management (MaRisk) on May 29, 2024, to establish a flexible and practical framework for risk management in financial institutions under Section 25a of the German Banking Act (KWG). The regulation mandates that institutions implement robust governance arrangements, including internal control systems, risk steering processes, and specific functions for risk controlling and compliance, to ensure adequate risk-bearing capacity. Furthermore, it aligns national requirements with EU Directive 2013/36/EU (CRD IV) by enforcing rigorous supervisory review processes and detailed standards for specific business areas such as credit, trading, and real estate.