RM-2.2.10
When setting the level of risk appetite relating to counterparties, the Board must ensure that:
(a) The expected rate of return on a transaction is commensurate with the risks incurred;
(b) Measures have been put in place to prevent excessive credit risk (at both individual and portfolio levels) and risk concentration (for example financing instruments, economic activity, geographical and sectoral spread); and
(c) It considers the CBB's exposure limits for counterparties.
January 2013