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On July 15, 2015

Risk Aggregation & Risk Reporting

Guideline BCBS 239: Aggregation of risk data and risk reporting.
The Basel Committee published article 239 in January 2013. This article describes 11 Principles for effective risk data aggregation and risk reporting. In the short term, this article has had a considerable impact on the flexibility and robustness of banks.

The core principle of BCBS 239 is that a bank must ensure that every cross section of risk data is available at every desired aggregation level, at all times. The basic tenets of the 11 principles are summarised below:

  • The governance of the risk organisation, data architecture and the IT infrastructure must support flexible, reliable and robust disclosure of and reporting on risk data.
  • Data must be available at every desired level and at any given moment. Strict requirements have been imposed on these data with regard to accuracy, completeness and integrity. It must be possible to reconcile and match these data with the financial data of the company at all times.
  • On the basis of these data, risk reports must be generated that meet requirements in terms of Accuracy, Comprehensiveness, Frequency Distribution, Clarity and Usefulness.

DNB is considering how to implement this guideline in financial institutions. This matter is expected to be clarified in 2016. Banks should not wait to see what happens, but should instead act now to follow this guideline.

You can find the complete article here: http://www.bis.org/publ/bcbs239.pdf

  • By Paul Bruggeman   1