Explanation:
Principle 1 (Governance) states that a bank’s risk data aggregation capabilities and risk reporting practices should be subject to strong governance arrangements consistent with Basel Committee principles. This places accountability with the board and senior management to ensure adequate oversight, resources, and alignment with the overall risk management framework. Option D mirrors this requirement directly.
A is incorrect. While governance should influence planning, Principle 1’s explicit focus is on establishing strong governance arrangements themselves. Embedding into planning is more commonly emphasized under implementation and IT/data architecture considerations (often linked to Principle 2).
B is incorrect. This aligns more closely with Principle 2 (Data architecture and IT infrastructure), which calls for integrated data architecture and consistent classifications across the group to support risk data aggregation.
C is incorrect. This statement reflects Principle 3 (Accuracy and Integrity), which requires banks to generate accurate and reliable risk data under both normal and stress/crisis conditions. It does not define the governance arrangements required by Principle 1.
Ultimate access to all questions.
Q.5322 A bank's CRO is assessing the bank's risk data management methods. The CRO observes that the Basel Committee has proposed numerous principles to encourage strong and effective risk data aggregation capabilities when describing various dimensions of a bank's data. Which of the following is a recommendation of Principle 1 on Governance of the Basel committee?
A
Banks should make risk data aggregation and reporting practices a crucial part of the bank's planning processes.
B
Banks should establish integrated data classifications and architecture across the banking group.
C
Banks should appoint individuals tasked with various data management responsibilities.
D
Banks should ensure their risk data aggregation capabilities and risk reporting practices are subject to strong governance arrangements.
No comments yet.