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

Which statement best captures the BCBS 239 principle of completeness in risk data aggregation capabilities?

Completeness means a bank captures and aggregates all material risk data across the group, broken down by dimensions such as asset type, industry and region so concentrations can be identified. It does not mean daily reporting of everything, one physical location, or excluding hard-to-source entities.

  1. AA bank must report every risk measure to the board daily regardless of materiality
  2. BA bank should capture and aggregate all material risk data across the banking group, including exposures by asset type, industry, region and other groupings that permit identifying concentrationsCorrect
  3. CA bank must hold identical data for all subsidiaries in one physical location
  4. DA bank may exclude any entity from aggregation if its data is difficult to obtain, provided it discloses this to shareholders

Explanation

Completeness requires capturing and aggregating all material risk data across the group, in groupings that reveal concentrations and emerging risks. Exclusion for convenience conflicts with it, though if data is not fully available, the bank should explain gaps to supervisors and management. Single physical location is not required.

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