Risk Aggregation & Risk Reporting

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. The article has a major impact on the flexibility and robustness of banks in the short term. The essence of BCBS 239 is that a bank must at all times have access to and insight into every cross-section of risk data at any desired aggregation level. The principles of the 11 principles are summarized below: • The governance of the risk organization, data architecture and IT infrastructure must support flexible, reliable and robust access to and reporting on risk data.
• Data must be available at any desired level and at any time. High demands are made on this data with regard to accuracy, completeness and integrity. This risk data must be reconcilable at all times and be compatible with the finance data of the company.
• Based on this data, risk reports must be generated that meet the requirements of Accuracy, Comprehensiveness, Frequency Distribution, Clarity and Usefulness. DNB is considering how this guideline should be implemented within financial institutions. The expectation is that this will become clear in 2016. Banks would do well not to wait but to act on this directive now. The full article can be found here: http://www.bis.org/publ/bcbs239.pdf

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