Country Risk Management

Oversight by the Board of Directors

If country risk is to be managed properly, the board of directors must oversee the process effectively. The board is responsible for periodically reviewing and approving policies governing the bank’s international activities to ensure that they are consistent with the bank’s strategic plans and goals. The board is also responsible for reviewing and approving limits on country exposure and ensuring that management is effectively controlling the risks. When evaluating the adequacy of the bank’s capital and allowance for loan and lease losses (ALLL), the board should also take into account the volume of foreign exposures and the ratings of the countries to which the bank is exposed.

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