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

A global systemically important bank's board approves a new risk reporting framework but the bank's risk data architecture differs across legal entities and relies on manual workarounds in several business lines. Under BCBS 239 Principle 2 (Data architecture and IT infrastructure), which action is most consistent with the principle?

Principle 2 requires data architecture and IT infrastructure that fully support risk data aggregation and reporting both in normal times and during stress or crisis. Permanent manual workarounds, fragmented taxonomies and crisis-only rebuilds are inconsistent with this requirement.

  1. ADesign data architecture and IT infrastructure that fully supports risk data aggregation and reporting practices in normal times and during stress or crisisCorrect
  2. BAllow manual processes as the permanent solution provided they are well documented
  3. CMaintain separate taxonomies for each legal entity to preserve local autonomy
  4. DPrioritise architecture for business-as-usual reporting and rebuild it only when a crisis occurs

Explanation

Principle 2 requires architecture and infrastructure that support aggregation and reporting both in normal times and in stress. Permanent manual workarounds, divergent taxonomies and crisis-only rebuilds all undermine integration and speed, so they are inconsistent.

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