Answer: It is ideal to have multiple sources of risk data for each type of risk facing the

## Explanation The correct answer is **B** because having multiple sources of risk data for each type of risk contradicts the governance principle established by the Basel Committee. ### Key Points: 1. **Basel Committee Governance Principle**: The committee emphasizes strong governance arrangements for risk data aggregation and reporting, which includes having consistent, reliable, and integrated data sources. 2. **Option A**: This statement aligns with the governance principle as it emphasizes that risk data aggregation should be an integral part of the risk management framework. 3. **Option B**: This statement diverges from the governance principle because: - Multiple sources of risk data can lead to inconsistencies, data quality issues, and reconciliation problems - The Basel Committee advocates for integrated, consistent data sources rather than fragmented multiple sources - Having multiple sources increases operational risk and makes data aggregation more complex - Best practices recommend having a single, reliable source of truth for risk data 4. **Governance Best Practices**: Strong governance requires: - Clear data ownership and accountability - Consistent data definitions and formats - Reliable data quality controls - Integrated data architecture - Single source of truth for risk data Therefore, option B represents a practice that would undermine effective risk data governance and aggregation capabilities.

Author: Tanishq Prabhu