Principles on Risk Concentration

To provide to banking, securities and insurance supervisors principles for ensuring through the regulatory and supervisory process the prudent management and control of risk concentrations in financial conglomerates. By combining business lines, conglomerates offer the potential for broad diversification. However, new risk concentrations may arise at the group level. In particular, different entities within the conglomerate could be exposed to the same or similar risk factors, or to apparently unrelated risk factors that may interact under some unusually stressful circumstances.