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FRM Part II · FRM Exam Part II · Risk Reporting

A bank's risk function produces a daily liquidity report that is accurate but arrives after senior management's morning meeting, so managers rely on the prior day's figures. Which BCBS 239 risk data aggregation and reporting principle is most directly breached?

The timeliness principle is breached. Accurate figures that reach senior management after the decision meeting cannot support decisions, so the bank is failing to generate reports quickly enough, especially in stress, even though accuracy, coverage and flexibility are not the issue.

  1. AAccuracy and integrity
  2. BTimeliness of risk reportingCorrect
  3. CComprehensiveness of report content
  4. DAdaptability to ad hoc requests

Explanation

The data are accurate, so integrity is not the problem. The issue is that reports are not produced fast enough to support decisions, which is the timeliness principle. Comprehensiveness concerns coverage of material risks, and adaptability concerns ad hoc requests.

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