FRM Part I · FRM Exam Part I · Principles for Effective Data Aggregation and Risk Reporting
A global systemically important bank (G-SIB) has material operations in several jurisdictions. Its home supervisor wants to evaluate the bank's compliance with BCBS 239 on a group-wide basis. Which approach best reflects Principle 14 on home/host cooperation?
Supervisors should cooperate across jurisdictions, exchanging information and coordinating reviews, for example through supervisory colleges, within confidentiality arrangements. This lets them judge the bank's group-wide data aggregation capability. Acting in isolation, imposing uncoordinated host standards, or cooperating only in a crisis does not meet Principle 14.
- AThe home supervisor alone reviews the group and avoids sharing results with host supervisors to protect confidentiality of the bank
- BEach host supervisor independently imposes its own distinct data standard on the local subsidiary without coordination
- CSupervisors cooperate and exchange information, including through supervisory colleges, and may coordinate reviews and share findings, subject to confidentiality arrangements, to assess the bank's overall capabilitiesCorrect
- DCooperation applies only after a crisis has started, since before this there is no need to share information
Explanation
Principle 14 calls for cooperation with relevant supervisors in other jurisdictions, with appropriate information sharing and coordination consistent with legal and confidentiality constraints. Isolated review, uncoordinated host standards, or crisis-only cooperation conflict with it.
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