Regulatory Alerts2020-12-03 | NASF-08Added · Updated
Technical Standards for Credit Risk Management, Limits on Risk Assumption and Loans to Related Parties of Development Banking Entities
The Committee of Standards of the Central Reserve Bank of El Salvador issued technical standards requiring development banking entities to establish organizational structures and policies for managing credit and concentration risks. These entities must implement continuous processes to identify, measure, control, and mitigate credit risk, including the estimation of expected losses based on default frequency and severity. The regulations mandate specific limits on risk assumption and loans to related parties, requiring entities to maintain adequate provisions and capital to cover identified risks.