Regulatory Alerts2016-01-12
Leveraged Lending Management
The Supervisor of Banks issued this directive to establish minimum expectations for banking corporations regarding the risk management of leveraged lending activities. The document requires institutions to define leveraged lending consistently, adopt robust underwriting and valuation standards, and implement comprehensive stress testing and reporting frameworks. Additionally, it mandates periodic board-level reviews of leveraged lending policies and portfolio performance to ensure sound business premises and sustainable borrower repayment capacity.
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