FRM Part II · FRM Exam Part II · Risk Reporting
A bank's credit exposure report is built by manually combining spreadsheets from several business lines, with frequent reconciliation breaks versus the general ledger. Which BCBS 239 principle does this most directly challenge, and what is the preferred remedy?
Accuracy and integrity is the challenged principle. Manual spreadsheet aggregation and breaks against the ledger signal unreliable data, so the bank should automate aggregation and reconcile risk data to accounting sources, rather than changing report length, frequency or distribution.
- AAccuracy and integrity; reduce manual processes and reconcile risk data to accounting sourcesCorrect
- BClarity and usefulness; shorten the report to one page
- CFrequency; move from monthly to daily reporting
- DDistribution; send the report to more recipients
Explanation
Manual spreadsheet aggregation with reconciliation breaks undermines accuracy and integrity. BCBS 239 expects automation to reduce error risk and reconciliation of risk data with sources such as accounting records. Changing length, frequency or distribution does not fix the data errors.
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