FRM Part I · FRM Exam Part I · Principles for Effective Data Aggregation and Risk Reporting
Which statement about the role of a bank's own implementation of the principles and supervisory review is most accurate?
Supervisors should review and evaluate a bank's compliance with the principles and may require independent validation of its data aggregation capabilities. They should not accept bank assertions without verification, delegate the review to rating agencies, or reverse the relationship.
- ASupervisors should rely solely on the bank's assertion of compliance with no verification
- BSupervisors should review and evaluate a bank's compliance, and may request independent validation of the bank's data aggregation capabilitiesCorrect
- CCompliance review is the responsibility of rating agencies
- DThe principles require banks to review supervisors' data practices
Explanation
BCBS 239 assigns supervisors the task of reviewing and evaluating compliance and permits them to require independent validation of aggregation and reporting capabilities. Relying solely on assertions, delegating to rating agencies, or reversing the review relationship is inconsistent with the principles.
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