Guidelines on the management of concentration risk under the supervisory review process

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These Guidelines follow a holistic approach which aims at ensuring sound overall concentration risk management; this means that institutions are expected to identify and assess all aspects of concentration risk, moving further away from the traditional analysis related only to intra-risk concentration within the credit risk. The guidelines are structured into five major sections. The first provides the definition of concentration risk and its two-fold focus on intra- and inter-risk concentrations (Section 2). Section 3 deals with general principles for management of concentration risk while the Section 4 addresses aspects of concentration risk management specific to particular risk areas (credit, market, operational and liquidity risks) and Section 5 provides underpinnings for the supervisory review and evaluation.


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