PFSA Issued Risk Management Recommendations

The Polish Financial Supervision Authority issued a recommendation setting out good practice principles for retail credit risk management by the banking sector, known as 'Recommendation T', which will come into force within a few months.

Recommendation T is the PFSA's response to a deterioration in the quality of the banks' household lending portfolio from 2008 Q4 onwards, especially in relation to consumer credit.

It comprises 25 recommendations covering management, risk, security interests, reporting, client relationships and internal audit.

These aim to secure the interests of both borrowers and lenders through a more rigorous evaluation of prospective borrowers' credit ratings and credit worthiness. They include requirements for banks to: