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  • CM-2.3 CM-2.3 Name-financing

    • CM-2.3.1

      Banks are exposed to credit risk when they provide large credit facilities on a 'clean' basis (i.e. without collateral or security). This risk is amplified, specifically, when such clean name financing is made without adequate (up to date) financial information.

      October 07

    • CM-2.3.2

      In many banks there is a tendency to indulge in 'name-financing' without any credit analysis or understanding of the concerned counterparty's current outstanding facilities from other banks. The CBB strongly discourages the banks to engage in such activities in order to minimise their credit risk and reputation risk.

      Amended: January 2011
      October 2007