FRM Part II · FRM Exam Part II · Risk Reporting
A bank's board asks why its risk reports take weeks to produce after quarter-end and contain figures that differ between business lines. An internal review finds that each division uses its own data definitions and manual spreadsheets. Which action most directly addresses the root cause under sound risk data aggregation principles?
The best fix is a group-wide data governance framework with common definitions and clear data ownership. The delays and inconsistencies stem from divisions using different definitions and manual processes, so standardizing data and assigning accountability is what enables accurate, timely aggregation, whereas reconciling separately or reporting less often does not.
- AEstablish a group-wide data governance framework with common data definitions and clear data ownershipCorrect
- BIncrease the number of pages in the quarterly risk report to include each division's figures
- CAsk each division to reconcile its own figures independently before submission
- DShift reporting from quarterly to annual to allow more preparation time
Explanation
The problem arises from inconsistent definitions and fragmented manual processes. Strong governance, common taxonomy and accountable data owners deliver consistent, timely aggregation. Divisional reconciliation leaves definitions inconsistent, and less frequent reporting worsens timeliness.
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