FRM Part II · FRM Exam Part II · Risk Reporting
A global bank finds that its legal entities record counterparty identifiers differently, so group-wide exposure to a single borrower cannot be consolidated without manual spreadsheets. Which BCBS 239 principle is most directly breached?
The breached principle is the need for an integrated data architecture and IT infrastructure with consistent data taxonomies. Inconsistent counterparty identifiers force manual consolidation, which undermines accuracy and speed. Distribution, supervisory powers and forward-looking content are separate principles not at issue in this scenario.
- ARisk data aggregation should be based on a single, integrated data architecture and IT infrastructure with consistent taxonomiesCorrect
- BRisk reports should be distributed only to those with a need to know
- CSupervisors should have powers to remedy deficiencies in risk reporting
- DRisk reports should include forward-looking assessments and stress scenarios
Explanation
Inconsistent identifiers across entities show a lack of integrated data architecture and common data taxonomy, forcing manual workarounds that raise operational risk and reduce accuracy. The other options concern distribution, supervisory powers and report content, not the data infrastructure failure described.
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