This SR letter and executive summary from the report should be made available to the banks in your district that participated in the study, other banks with cross-border exposure, as well as international bank examiners for their consideration. While some general similarities can be identified, large differences exist in how the banks identify, measure, set limits for, monitor, and manage country risk exposures. All banks have developed formal country risk management programs. Most programs are centralized. Banks usually have adopted formal country risk management policies that are board approved.
All banks have formal internal country risk monitoring and reporting mechanisms.
The type and content of country risk management reporting to senior management, board appointed committees, and the board of directors vary considerably. Typically, country risk management is integrated with credit risk management. However, several large banks integrate country risk management into their overall risk management process. Responsibility for country risk management generally lies with either a senior country risk officer or a high-level country risk committee. Most bank country managers are responsible for recommending specific country marketing strategies and risk tolerances.