Service Group in Brazil
Credit Risk is defined as the likelihood of losses caused by the bank not being paid by its clients due to their economic-financial problems. This definition includes all operations in which the Bank grants or undertakes to grant funding under its various forms, including loans, transfers, advances, loan commitments, guarantees, letters of credit and derivatives transactions (futures, swaps, forwards and options) in which the client might become liable.
The Credit and Market Risk Management is an independent group that reports to the local president of the bank in Brazil in parallel with the Regional Credit and Market Risk Management division in New York.
The main responsibilities of the Credit and Market Risk Management in Brazil are:
- Evaluate the ability of the clients of JP Morgan Brazil to generate sufficient funds through their commercial activities and conversion of their assets in order to settle their financial and operational obligations on their due dates as previously agreed;
- Assign risk ratings for each borrower and transaction consistent with the financial and economic situation of the clients and the availability and liquidity of the guarantees where applicable;
- Approve independently all credit limits granted to their customers, as well as monitoring and managing their use in an active and frequent manner;
- Monitor, evaluate and manage the credit portfolio from the point of view of possible concentrations on clients, ratings, industries, regions or products, ensuring a balanced distribution of risks; and
- Participate in discussions and assignments of provisions and capital reserves appropriate to the level of exposure and portfolio.