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FRM Part II · FRM Exam Part II · Sound Management of Risks Related to Money Laundering and Financing of Terrorism

Under the BCBS guidelines, which statement best describes cooperation between supervisors in supervising a cross-border banking group for ML/FT risk?

Home and host supervisors should cooperate and share information, including on group-wide controls and inspection findings, subject to confidentiality requirements. Barring contact, assigning responsibility solely to the home supervisor, or waiting for convictions would hinder effective supervision of cross-border ML/FT risk.

  1. AHome and host supervisors should share information and cooperate, including on group-wide controls and findings, subject to confidentiality requirementsCorrect
  2. BHost supervisors are barred from contacting home supervisors without the bank's consent
  3. COnly the home supervisor has any responsibility for the group's foreign operations
  4. DSupervisors should exchange information only after a criminal conviction

Explanation

The guidelines stress effective cross-border cooperation and information exchange between home and host supervisors, as well as with financial intelligence units and law enforcement, within confidentiality limits. Restricting contact or waiting for convictions defeats effective supervision.

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