All loan assets are subject to recurring review and  assessment for possible impairment. Where there is a  deteriorating credit risk profile, the exposures are monitored  on a monthly basis through the CreditWatch reports. The  business remains responsible for the management of the  counterparty and of the risk position, but RMG oversight is  increased to ensure that positions are managed for optimal  outcomes. When counterparties default, RMG and the  business work together to resolve the issues and ensure  provisioning is adequate. A review of the credit portfolio that involves monitoring credit  concentrations by counterparty, country, risk type, industry  and credit quality is carried out quarterly and reported to the  Board semi-annually. Policies are in place to regulate large  exposures to single counterparties or groups of  counterparties.  The Consolidated Entity has a country risk framework which  covers the assessment of country risk and the approval of  country risk limits. Where appropriate the country risk is  covered by political risk insurance.  The balances disclosed in the credit risk tables below  exclude financial assets that are subject to risks other than  credit risk, such as equity investments, commodities,  interests in associates and joint ventures or bank notes and  coins.  The responsibility for approval of credit exposures is  delegated to specific individuals by the Board. Credit risk  analysis is focused on ensuring that risks have been fully  identified and that the downside risk is properly understood  and acceptable. After this analysis is undertaken, limits are  set for an acceptable level of potential exposure. All  wholesale limits and ratings are reviewed at least once a  year, or more frequently if necessary. Retail credit exposures  are monitored on a portfolio basis.  Credit risk is defined as the risk of a counterparty failing to  complete its contractual obligations when they fall due. The  consequent loss is either the amount of the loan not paid  back, or the loss incurred in replicating a trading contract  with a new counterparty.  All credit exposures are monitored regularly against limits.  Credit exposures for loans are evaluated as either the full  current face value or, for distressed debt, the acquisition  cost when acquired in the secondary market. Exposures for  derivatives depend on potential future asset prices. To  mitigate credit risk, the Consolidated Entity makes use of  margining and other forms of collateral or credit  enhancement techniques (including guarantees, letters of  credit, the purchase of credit default swaps and mortgage  insurance) where appropriate.  All wholesale exposures are allocated to a Macquarie rating  on a scale that broadly corresponds to Standard & Poor’s  and Moody’s Investor Services credit ratings. Each  Macquarie rating maps to a Probability of Default estimate.  All wholesale counterparties and certain individual facilities  are assigned a Loss Given Default estimate reflecting the  estimated economic loss in the event of default occurring.  Macquarie determines the credit quality of a financial asset  by the credit rating assigned to the specific counterparty by  the RMG Credit Team. The RMG Credit Team assigns  ratings of MQ1 to MQ99 to individual counterparties that  equate to ratings assigned by external rating agencies as  follows:  175  Credit Grading  Internal Rating  External  Equivalent  Investment Grade  MQ1 to MQ8  AAA to BBB-  Below Investment Grade  MQ9 to MQ16  BB+ to C  Default  MQ99  Default  Note 38.1  Credit risk