1. The credit risk control unit shall be independent from the personnel and management functions responsible for originating or renewing exposures and report directly to senior management. The unit shall be responsible for the design or selection, implementation, oversight and performance of the rating systems. It shall regularly produce and analyse reports on the output of the rating systems.
2. The areas of responsibility for the credit risk control unit or units shall include:
(a) testing and monitoring grades and pools;
(c) implementing procedures to verify that grade and pool definitions are consistently applied across departments and geographic areas;
(d) reviewing and documenting any changes to the rating process, including the reasons for the changes;
(e) reviewing the rating criteria to evaluate if they remain predictive of risk. Changes to the rating process, criteria or individual rating para…