The PRA asked the internal audit function of a selection of non-systemic UK deposit takers to review their Credit Risk Management Framework. 33 firms participated and results showed the most common finding was yellow rated (being moderate breaches of control procedures and less serious than amber and red ratings). The PRA has concluded the following areas need improvement:
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affordability assessments;
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QA and underwriting process;
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quality of MI;
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credit risk appetite;
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lending policy; and
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collections.