Credit union officials and management have a fiduciary responsibility to identify, measure, monitor, and control concentration risk. Concentration risk must be managed in conjunction with credit, interest rate and liquidity risks; as a negative event in any category may have significant consequences on the other areas, as well as strategic and reputation risks. The ultimate responsibility for setting the level of concentration risk assumed by the credit union rests with the board of directors. Senior management is responsible for maintaining concentration risk within the parameters set by the board of directors.
NCUA: Letter to Credit Unions No. 10-CU-03 – Concentration Risk: Attachment – Supervisory Letter: Concentration Risk (3/10)
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