FRM Part II · FRM Exam Part II · Risk Reporting
A bank's operational risk report to the board is 120 pages of raw loss-event tables with no summary, and the key trends are hard to find. Which remedy best aligns with BCBS 239's expectations for risk reports?
The best remedy is adding an executive summary that highlights key exposures, trends and emerging risks, with detail available for drill-down. BCBS 239 calls for clear, useful reports tailored to the audience, so the board can quickly grasp the risk picture instead of searching through raw data tables.
- AIncrease the report frequency from monthly to daily without changing content
- BAdd an executive summary highlighting key exposures, trends and emerging risks, with supporting detail available on requestCorrect
- CRemove all forward-looking information to preserve accuracy
- DRestrict distribution to the CRO only to protect confidentiality
Explanation
BCBS 239 requires reports to be clear and useful: conveying information concisely, with the right level of detail for the audience, including forward-looking and emerging risk views. Higher frequency or restricted distribution does not fix the clarity problem, and removing forward-looking content contradicts the guidance.
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