FRM Part II · FRM Exam Part II · Risk Reporting
During a market stress event, a bank's chief risk officer asks for exposure by sector and country for a specific counterparty group, a cut not included in routine reports. The data team needs two weeks to build it. Which capability is most clearly lacking?
The bank lacks adaptability, meaning the flexibility to produce ad hoc, on-demand risk reports across different dimensions such as sector and country. A two-week build during stress shows aggregation is geared to fixed routine reports, not to rapid unexpected management requests.
- AFlexibility to produce ad hoc, on-demand risk reports across different dimensionsCorrect
- BConsistent use of a data dictionary for definitions
- CAutomated reconciliation of risk data to accounting records
- DStrong physical security of data centers
Explanation
The inability to rapidly generate a non-standard cut of data in a stress is a lack of adaptability, meaning flexible aggregation by various dimensions on request. A data dictionary, reconciliation and physical security are valid controls but are not what the scenario shows failing.
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