4.1

Each LFI must have a credit review function headed by the CCO that is responsible for the prudent acquisition of Credit Risk arising from all products types across the LFI.
 

For Wholesale Obligors, the function must review individual transactions in order to assess the specific Credit Risk of facilities, in accordance with Article 5 of this regulation focusing on credit underwriting.
 

For Retail Obligors, the acquisition of Credit Risk must be controlled and governed at minimum at portfolio level.
 

4.2

Each LFI must have an independent Credit Risk Management Function within the risk management function headed by the CRO to conduct adequate and continuous oversight of the acquisition and management of Credit Risk. This function must safeguard the LFI from acquiring Credit Risk that is not within the LFI’s Risk Appetite, is not in accordance with the LFI’s policies, or may otherwise present a threat to the LFI.
 

4.3

While the Credit Risk Management Function must not have any decision-making role in the acquisition of Credit Risk, the Credit Risk Management Function must nevertheless have the power and responsibility to veto credit proposals where necessary, including but not limited to instances where the Risk Limits are or risk being breached.
 

4.4

The internal audit function, compliance function and external audit function must have an active role in the control and oversight of Credit Risk throughout the LFI.