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FRM Part I · FRM Exam Part I · Principles for Effective Data Aggregation and Risk Reporting

A bank's risk function finds that its exposure to a single corporate group, spread across several subsidiaries and business lines, cannot be consolidated quickly because each system uses different counterparty identifiers. Which BCBS 239 data aggregation principle is most directly breached?

The completeness principle is most directly breached. It requires a bank to capture and aggregate all material risk data across the group, including exposures to a single counterparty across entities and business lines. Inconsistent counterparty identifiers prevent that consolidated view of exposure.

  1. ACompleteness, because the bank cannot capture all material risk exposures for a group across the entity and business linesCorrect
  2. BAdaptability, because the bank cannot add new report formats
  3. CAccuracy of the risk-report distribution list to board members
  4. DTimeliness of the annual stress test scenario selection

Explanation

Inconsistent counterparty identifiers prevent the bank from capturing and aggregating all material exposures to one group by entity, business line and risk type. That is a completeness failure; it also relates to data architecture, but completeness is most direct. The other options address different matters.

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