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

Under BCBS 239, a supervisor finds material weaknesses in a bank's risk data aggregation. Which of the following actions is explicitly in line with Principle 13 on remedial actions and supervisory measures?

Supervisors should require a credible remediation plan with timelines and escalate with measures such as limits on business growth or extra capital if progress is inadequate. Automatic licence revocation, delay in communication, or using competitors to fix the problem are not what Principle 13 describes.

  1. ARequiring a remediation plan with timelines, and using measures such as restricting business growth or requiring additional capital where progress is inadequateCorrect
  2. BImmediately revoking the bank's licence regardless of the severity of the weaknesses
  3. CWaiting for the next annual report before communicating any concerns to the bank
  4. DAsking the bank's competitors to implement the remediation on its behalf

Explanation

Principle 13 expects supervisors to be able to require remedial action and to use escalation tools such as business restrictions or additional capital, with a plan and timelines. Automatic licence revocation, delayed communication, and involvement of competitors are not in the guidance.

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