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| Article 193 of CRD IV: | | [[Credit risk mitigation]] is defined, rather airily, inArticle 4(57) of the {{eureg|575|2013|}} as: |
| | {{crrquote|{{CRR Article 4(57)}}|4(57)}} |
| | The concept of [[credit risk mitigation techniques]] originates in the {{tag|Basel}} regulatory framework, which is in turn implemented by {{tag|CRR}}. {{tag|Basel}} is a little more specific, but still has a bit of the “[[Brexit means Brexit]]” about it. |
| | ===[[CRM technique]]s=== |
| | {{crmtechniques}} |
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| {{box|Article 193 <br> | | ===See also=== |
| Principles for recognising the effect of credit risk mitigation techniques <br>
| | *Article {{crdprov|193}} of {{tag|CRD IV}}: |
| :1. No exposure in respect of which an institution obtains credit risk mitigation shall produce a higher risk-weighted exposure amount or expected loss amount than an otherwise identical exposure in respect of which an institution has no credit risk mitigation. | | *Article {{crdprov|194}} of {{tag|CRD IV}} |
| :2. Where the risk-weighted exposure amount already takes account of credit protection under Chapter 2 or Chapter 3, as applicable, institutions shall not take into account that credit protection in the calculations under this Chapter.
| | *Article {{crdprov|272(4)}} of {{tag|CRD IV}} |
| :3. Where the provisions in Sections 2 and 3 are met, institutions may amend the calculation of risk-weighted exposure amounts under the Standardised Approach and the calculation of risk-weighted exposure amounts and expected loss amounts under the IRB Approach in accordance with the provisions of Sections 4, 5 and 6.
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| :4. Institutions shall treat cash, securities or commodities purchased, borrowed or received under a repurchase transaction or securities or commodities lending or borrowing transaction as collateral.
| | {{anat|crr}} |
| :5. Where an institution calculating risk-weighted exposure amounts under the Standardised Approach has more than one form of credit risk mitigation covering a single exposure it shall do both of the following:
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| ::(a) subdivide the exposure into parts covered by each type of credit risk mitigation tool;
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| ::(b) calculate the risk-weighted exposure amount for each part obtained in point (a) separately in accordance with the provisions of Chapter 2 and this Chapter.
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| :6. When an institution calculating risk-weighted exposure amounts under the Standardised Approach covers a single exposure with credit protection provided by a single protection provider and that protection has differing maturities, it shall do both of the following:
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| ::(a) subdivide the exposure into parts covered by each credit risk mitigation tool;
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| ::(b) calculate the risk-weighted exposure amount for each part obtained in point (a) separately in accordance with the provisions of Chapter 2 and this Chapter.
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