Credit risk mitigation techniques (CRM)

There are a range of credit risk mitigation techniques available to credit institutions, which if the corresponding regulations in the CRR are fulfilled may also be used to reduce the minimum own funds requirements. Exposures may be collateralised using collateral-based or personal securities; there is also the option to purchase a credit derivative in order to be able to exclude various forms of credit risk. Moreover, institutions may enter into netting agreements, in which credits and deposits are netted from the same counterparties.