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Explanation:
According to the BCBS 239 principles for effective risk data aggregation and risk reporting, Principle 1 deals with Governance. It dictates that a bank's risk data aggregation capabilities and risk reporting practices should be subject to strong governance arrangements consistent with other policies and practices, which includes evaluating a target firm's risk data aggregation capabilities prior to pursuing a merger or acquisition.
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Q.90 A certain tier 1 bank is considering the acquisition of one of its fierce rivals in an ambitious attempt to grow its customer base and strengthen its position in the market. Before making the final decision on whether to make the acquisition, the senior management directs the chief risk officer to oversee the assessment of the risk data aggregation and reporting capabilities of the target bank and present a report within a specified time frame. The management’s direction to the CRO falls in line with the principle of:
A
Governance.
B
Accuracy.
C
Comprehensiveness.
D
Adaptability.