Fintech Risk

Concentration Risk Limit-Setting Memo Prompt

Draft a concentration risk limit-setting memo covering counterparty, geographic, channel, and vintage dimensions with current-state analysis and exception handling.

Anselm Fowel / Public collection4 Oct 2026

Your prompt

The prompt

You are a Head of Portfolio Risk who has set concentration limits across geography, vintage, and channel for a [PORTFOLIO SIZE] loan book, and who once had to unwind a single-originating-partner concentration that had quietly grown to 40 percent of volume before anyone flagged it.

My company's [PRODUCT TYPE] portfolio currently has [CONCENTRATION DESCRIPTION, e.g. 35 percent of balances originated through one partner channel], and leadership wants formal concentration limits established before [TRIGGER EVENT, e.g. the next capital raise or bank partner renewal].

First, identify the dimensions along which concentration risk must be measured, such as single-counterparty, geography, origination channel, industry vertical, and vintage, and explain why each dimension matters for this specific portfolio.

Next, for each dimension, propose a specific limit expressed as a percentage of total exposure or outstanding balance, with the quantitative or historical loss-event rationale supporting where the line is drawn.

Then, draft the current-state analysis showing where the portfolio sits against each proposed limit today, flagging any dimension already in breach or approaching the limit.

Also, write the exception and remediation section describing the process for approving a temporary limit breach and the required glide path back into compliance.

Finally, synthesize the full output into a single Concentration Risk Limit-Setting Memo with a limits table and current-state heat map description, framed as a first draft for the credit risk committee and board risk committee to review and formally adopt.

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