Skip to content

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

During a market shock, a bank's senior management requests exposure to a particular sector across all legal entities within 24 hours, but the bank can only produce it in two weeks. Which risk data aggregation principle does this most clearly breach?

This breaches the timeliness principle. Banks must be able to generate aggregate risk data quickly enough to meet critical reporting needs, especially in stress or crisis. A two-week lag against a 24-hour request shows speed, not data correctness, is the shortfall.

  1. ATimelinessCorrect
  2. BAccuracy
  3. CComprehensiveness of reports
  4. DDistribution

Explanation

Timeliness requires a bank to generate aggregate risk data quickly, with critical risks such as those in a crisis available at short notice. A two-week lag against a 24-hour need shows a timeliness failure, not an accuracy failure, since the data's correctness is not in question.

Did you get it right without looking?

One question tells you little. A timed set on Principles for Effective Data Aggregation and Risk Reporting shows your real accuracy, how long you take and where you lose marks.

Practise Principles for Effective Data Aggregation and Risk ReportingFree diagnostic mock

More Principles for Effective Data Aggregation and Risk Reporting questions