Vincent van Gogh Starry Night over the Rhone painting

Vincent van Gogh Starry Night over the Rhone paintingVincent van Gogh Irises paintingWassily Kandinsky Farbstudie Quadrate painting
While the exact approach chosen by individual supervisors will depend on a host of factors, including their on-site and off-site supervisory techniques and the degree to which external auditors are also used in the supervisory function, all members of the Basel Committee agree that the principles set out in this paper should be used in evaluating a bank's credit risk management system. Supervisory expectations for the credit risk management approach used by individual banks should be commensurate with the scope and sophistication of the bank's activities. For smaller or less sophisticated banks, supervisors need to determine that the credit risk management approach used is sufficient for their activities and that they have instilled sufficient risk-return discipline in their credit risk processes.
7. The Committee stipulates in Sections II through VI of the paper, principles for banking supervisory authorities to apply in assessing bank's credit risk systems. In addition, the appendix provides an overview of credit problems commonly seen by supervisors.