Credit risk mitigation eba

How do you mitigate credit risk exposure?
Employ financial instruments like trade credit insurance to mitigate risk exposure in trade transactions.
Set up risk monitoring on obligor's creditworthiness, credit conditions, and intended use of credit facilities.
Create a sound reporting system and get notified about risks, changes or problem credits..
What is credit risk mitigation?
Credit Risk Mitigation (“CRM”) refers to the attempt by lenders, through the application of various safeguards or processes, to minimize the risk of losing all of their original investment (loans or debt) due to borrowers (companies or individuals) defaulting on their interest and principal payments..
By developing a comprehensive credit risk management policy, conducting regular credit risk assessments, implementing robust credit risk mitigation mechanisms, providing regular employee training, developing a comprehensive credit risk response plan, conducting regular credit risk reviews, and ensuring compliance with
The Basics of the European Banking Authority (EBA)
The EBA is tasked with developing regulatory technical standards and rules for financial firms in the EU internal market.
It oversees lending institutions, investment firms, and credit institutions.

EBA consults on Guidelines on credit risk mitigation for institutions applying the IRB approach with own estimates of LGD.

How do you mitigate credit risk exposure?