Monitoring and Reporting of Risk
HC-6.6.28
A
Conventional bank licensee's MIS must provide the Board andsenior management with timely and relevant information concerning their risk profile, in a clear and concise manner. This information must include all risk exposures, including those that are off-balance sheet.Senior management must understand the assumptions behind, and limitations inherent in, specific risk measures.Added: July 2018HC-6.6.29
Conventional bank licensees must establish appropriate risk management methodologies, tools and models and systems commensurate with the nature and complexity of their business.Added: July 2018HC-6.6.30
Where
conventional bank licensees use models to measure components of risk, they must establish model governance frameworks including regulatory validation and testing.Added: July 2018HC-6.6.31
Conventional bank licensees must have information systems that are adequate (both under normal circumstances and in periods of stress) for measuring, assessing and reporting on the size, composition and quality of exposures on a bank-wide basis across all risk types, products, countries, region, etc. and counterparties. These reports must reflect the bank's risk profile, capital and liquidity needs, and are provided on a timely basis to the bank's Board andsenior management . A bank's MIS must be capable of capturing limit breaches, and there must be procedures in place to promptly report such breaches tosenior management , as well as to ensure that the appropriate follow-up actions are taken.Added: July 2018HC-6.6.32
The CRO must consistently remind staff, through a regular process, under the sponsorship of the CEO, of the risk management requirements and enhance a common understanding of these requirements across the bank in order to create a culture of risk awareness.
Added: July 2018
