Guide · International body
Principles for the management of credit risk
Basel confirms the continued relevance of its 2000 credit principles and aligns them with the current framework, without changing their substance.
- Organization
- Basel Committee on Banking Supervision (BCBS)
- Document date
- 30 April 2025
- Type
- Guide
- Language
- English
- Scope
- International
- Length
- 19 pages
What it contains
In 2000 the Basel Committee issued the Principles for the management of credit risk so that supervisors would promote sound practices. After a review prompted in part by a July 2023 supervisory newsletter on credit risk, the Committee concluded that the principles remain relevant but that some parts had become obsolete, superseded or redundant or were not fully aligned with the Basel Framework and the Committee’s guidance. It therefore approved a limited set of technical amendments; the final version was published on 30 April 2025, after a consultation held between February and March of that year.
The 16 principles are grouped into four areas plus the role of supervisors: establishing an appropriate credit risk environment (strategy and policies approved by the board at least once a year, senior management responsibility and management of risk across all products and activities); operating under a sound credit-granting process (defined granting criteria, limits per borrower and connected groups, approval of new credits and arm’s-length transactions); maintaining appropriate administration, measurement and monitoring (internal rating systems, information systems and analytical techniques, consideration of forward-looking market and macroeconomic factors); and ensuring adequate controls, with independent review, management of exposures and early remedial action on deteriorating credits. Principle 16 is addressed to supervisors.
Among the amendments, the Committee removed provisions already covered elsewhere in the Basel Framework, cleaned out outdated ones, updated references to Committee publications and added to each principle references to the international standards and supervisory practices that support it. It also removed the annex on common sources of major credit problems, whose topics are covered in other standards.
Why it matters for risk management
It is a standard reference for reviewing credit-granting, monitoring and control policies and for dialogue with auditors and supervisors. The principles are addressed to banking supervisors; their local enforceability depends on current Dominican regulation.
The Club had published the February 2025 consultation version (comments until 21 March 2025). This entry describes the final version now in force.
Summary prepared by the Dominican Republic Risk Management Club from a reading of the original document, with the source verified on 7 October 2026. It does not replace reading the official text and is not advice.
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