1. An institution shall establish and maintain a CCR management framework, consisting of:
(a) policies, processes and systems to ensure the identification, measurement, management, approval and internal reporting of CCR;
(b) procedures for ensuring that those policies, processes and systems are complied with.
Those polices, processes and systems shall be conceptually sound, implemented with integrity and documented. The documentation shall include an explanation of the empirical techniques used to measure CCR.
2. The CCR management framework required by paragraph 1 shall take account of market, liquidity, and legal and operational risks that are associated with CCR. In particular, the framework shall ensure that the institution complies with the following principles:
(a) it does not undertake business with a counterparty without assessing its creditworthiness;
(b) it takes due account of settlement and pre-settlement credit risk;
(c) it manages such risks as comprehensively as practica
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