FRM Part II · FRM Exam Part II · Risk Reporting
A bank relies on manual spreadsheets to aggregate credit, market and operational risk data from several legal entities. An internal review finds frequent errors and a three-week delay for quarter-end aggregation. Which assessment is most consistent with BCBS 239?
The assessment is deficient because the manual process undermines accuracy and timeliness. BCBS 239 expects risk data aggregation to be largely automated, with manual workarounds minimised and subject to controls. It does not ban spreadsheets outright, and it applies to all material risks, not just trading.
- AAcceptable, provided the manual process is documented and the final report is signed off by management
- BAcceptable, because BCBS 239 applies only to trading book data
- CDeficient, because the process weakens both accuracy and timeliness, and manual workarounds should be minimised and controlled, especially for critical risk dataCorrect
- DDeficient only because spreadsheets are prohibited outright under BCBS 239
Explanation
BCBS 239 expects automated aggregation to the extent possible and limits reliance on manual processes, which must be controlled where they remain. Frequent errors and a three-week delay indicate failures of accuracy and timeliness. The guidance does not outright ban spreadsheets, and it covers all material risks, not only trading.
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