Position, Dealer, Stop-Loss and Exposure Limits

Position, Dealer, Stop-Loss and Exposure Limits - Article

Treasury limits convert a bank's risk appetite into practical dealing boundaries. **Position limits** control market exposure, **dealer limits** restrict individual authority, **stop-loss limits** trigger action when losses reach approved levels, and **exposure limits** control concentration with counterparties, issuers, products, or markets. This article explains these controls through practical CAIIB cases involving bonds, forex, repo, dealer breaches, and counterparty exposures.