FRM Part II · FRM Exam Part II · Risk Reporting
A bank's quarterly board risk report has 120 pages of tables, with limit breaches and emerging risk concentrations placed in appendices. Directors say they cannot find the key messages. Under BCBS 239 reporting principles, which change best addresses this?
Present concise reports highlighting key exposures, limit breaches and emerging risks, with detail available on request. This meets the clarity and usefulness principle, whereas adding tables, reducing frequency or dropping qualitative commentary would make the board's decisions harder.
- AAdd more granular data tables to improve comprehensiveness
- BPresent concise reports that highlight key exposures, breaches and emerging risks, with detail available on requestCorrect
- CMove reporting from quarterly to annual to reduce volume
- DReplace all qualitative commentary with quantitative metrics
Explanation
The clarity and usefulness principle calls for reports that are easy to understand, concise and focused on information decision makers need, including emerging risks, with drill-down available. Adding tables worsens the issue, reducing frequency harms timeliness, and BCBS 239 values qualitative commentary and expert judgment too.
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