## Risk Diversification in the Credit Portfolio : An Overview of Country Practices

_IMF Working Papers, December 1, 2001_

## Source details

**Canonical URL:** [Risk Diversification in the Credit Portfolio : An Overview of Country Practices](https://www.imf.org/en/publications/wp/issues/2016/12/30/risk-diversification-in-the-credit-portfolio-an-overview-of-country-practices-15534)

## Other formats

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## Bibliographic details
- Authors: JoAnne Morris
- Published: December 1, 2001
- Series: IMF Working Papers

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### Summary
- This paper reviews the rules in place in selected countries to limit risk concentrations in the credit portfolio.
- The paper focuses on issues suggested by international organizations for countries and bank supervisors to consider in imposing standards for risk diversification in the credit portfolio.
- Issues reviewed for each country are:
  - the large exposure limits,
  - the definition of credit exposure (including application on a consolidated basis),
  - the definition of a group of related borrowers.
- Conclusion: most of the countries reviewed set limits on large exposures for banks and define a related group of borrowers in line with recommended international standards.

### Key Findings
- Most countries reviewed:
  - set limits on large exposures for banks, and
  - define a related group of borrowers in line with recommended international standards.
- Major differences identified among countries include:
  - how to determine the credit exposure,
  - the application of the exposure limits on a consolidated basis,
  - whether to impose limits on exposure to a specific sector.

### Subject Matter and Keywords
- Subject: Credit risk
- Keywords: bank for international settlements, banking, banking supervision, capital adequacy, capital base, credit concentration, large credit exposure, risk diversification

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## Content in this bundle

- **Risk Diversification in the Credit Portfolio:  An Overview of Country Practices - WP/01/200**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/risk-diversification-in-the-credit-portfolio-an-overview-of-country-practices-15534_