Early warning indicators (credit)

Roles that need it

• Credit Risk Analyst
• Corporate Credit Analyst
• Collections & Recoveries Specialist
• Relationship Manager (Corporate & Business Banking)

Skills it belongs to

• Credit analysis and creditworthiness
• Risk judgment and escalation instinct
• Data cleaning and validation

Related concepts

• Significant increase in credit risk (SICR)A significant increase in credit risk is the IFRS 9 test that moves an asset from Stage 1 to Stage 2. Banks usually combine a relative change in lifetime probability of default, watchlist or forbearance flags, and the rebuttable 30 days past due backstop.
• Credit limitA credit limit is the maximum exposure a lender is willing to have to a borrower, a group of connected clients, a sector or a country. Limits are approved by delegated authority, monitored daily or monthly, and breaches are escalated.
• ForbearanceForbearance is a concession, such as a payment holiday, longer maturity or lower rate, granted to a borrower facing or about to face financial difficulty. The CRR defines forborne exposures, which carry probation periods before the flag can be removed.
• Definition of defaultUnder CRR Article 178 a borrower is in default when a material obligation is more than 90 days past due or the bank considers the borrower unlikely to pay in full without realising collateral. EBA guidelines set materiality thresholds and cure periods.

Sources

• Principles for the management of credit risk, BIS (external site) accessed 31 Oct 2026

Updated 31 Oct 2026.