FRM Part II · FRM Exam Part II · Sound Management of Risks Related to Money Laundering and Financing of Terrorism
Which statement best describes the role of cooperation between home and host supervisors in supervising a cross-border bank's ML/FT risk, as set out in the BCBS guidelines?
Supervisors should exchange information relevant to a cross-border bank's ML/FT risk, and home supervisors should be able to verify group-wide compliance, including through on-site visits to foreign offices. Restricting cooperation to prosecutions or ownership structure would weaken consolidated supervision.
- ASupervisors should exchange information relevant to the bank's ML/FT risk, and home supervisors should be able to verify group compliance, including by on-site visits to foreign officesCorrect
- BHost supervisors alone are responsible, and home supervisors must not request information about foreign offices
- CSupervisors should only share information after a criminal prosecution has begun
- DSupervisors share information only about the bank's legal entity structure, not its ML/FT controls
Explanation
The guidelines emphasise information exchange between supervisors and the ability of home supervisors to verify that group policies are implemented in foreign offices. Limiting cooperation to prosecutions or structure would undermine effective consolidated supervision.
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