Article 16
Credit risk control unit
1. When assessing the internal governance and oversight of the institution in relation to the credit risk control unit referred to in Article 190 of Regulation (EU) No 575/2013, competent authorities shall verify that:
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(a) |
the credit risk control unit or units are separate and independent of the personnel and management functions responsible for originating or renewing exposures; |
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(b) |
the credit risk control unit or units are functional and adequate for their tasks. |
2. For the purposes of the verification under paragraph 1(a), competent authorities shall verify that:
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(a) |
the credit risk control unit or units are distinct organisational structures within the institution; |
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(b) |
the head of the credit risk control unit or the heads of such units are part of the senior management; |
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(c) |
the credit risk management function is organised taking into account the principles set out in Article 76(5) of Directive 2013/36/EU; |
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(d) |
the staff and the senior management responsible for the credit risk control unit or units are not responsible for originating or renewing exposures; |
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(e) |
senior managers of the credit risk control unit or units and of units responsible for originating or renewing exposures report to different members of the management body of the institution or of the committee designated by it; |
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(f) |
the remuneration of the staff and senior management responsible for the credit risk control unit or units is not linked to the performance of the tasks relating to originating or renewing exposures. |
3. For the purposes of the verification under paragraph 1(b), competent authorities shall verify that:
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(a) |
the credit risk control unit or units are proportionate to the nature, size and degree of complexity of the business and organisational structure of the institution, and in particular to the complexity of the rating systems and their implementation; |
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(b) |
the credit risk control unit or units have adequate resources, and experienced and qualified personnel to undertake all relevant activities; |
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(c) |
the credit risk control unit or units are responsible for the design or selection, implementation and oversight and the performance of the rating systems, as required by the second sentence of Article 190(1) of Regulation (EU) No 575/2013, and that the areas of responsibility of that unit or those units include those listed in Article 190(2) of that Regulation; |
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(d) |
the credit risk control unit or units regularly inform the senior management of the performance of the rating systems, of areas needing improvement, and of the status of efforts to improve previously identified deficiencies. |