Regulation on Credit Risk Management

This document provides Albania's regulation on credit management. The document states that the purpose of the regulation is to help banks manage their credit risk to minimize their potential losses from loans and other assets.

The document establishes the criteria and methods for classifying loans and other bank's assets, calculating an adequate level of reserves to cover potential loan and other asset losses. It provides criteria and methods for classifying:

• Standard loans;
• Special mention loans;
• Substandard loans;
• Doubtful loans;
• Loss loans;
• Other assets and doubtful commitments.

The document concludes that banks should classify their loans and assets and create reserve funds to cover losses at least on a quarterly basis.