Basel Committee Issues Consultative Document on Sound Credit Risk Assessment and Valuation for Loans
The Basel Committee on Banking Supervision has issued guidance for banks and supervisors on sound credit risk assessment and valuation policies and practices for loans. The paper will replace the sound practices paper for loan accounting and disclosure published by the Committee in July 1999. It addresses how common data and processes may be used for credit risk assessment, accounting and capital adequacy purposes. It also highlights provisioning concepts that are intended to be consistent with prudential and accounting frameworks.