Explanation:
Principle 1 established by the Basel Committee for effective data aggregation and reporting covers Governance. As part of this principle, a bank should ensure that its data aggregation and risk reporting practices are reviewed and validated by independent individuals who have IT and risk reporting expertise. These practices are not written by the board of directors, but they need to be supported by them. The practices should not be affected by the bank's structure, in that they will not change—even if the bank's location or legal organization changes. Also, in the event the bank acquires another bank, the two banks should eventually have integrated (rather than segregated) data aggregation and reporting processes.
(Book 1, Module 7.1, LO 7.c)
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Question 58
A senior manager at Minan Bank in Scotland is developing the supporting documentation for the data aggregation and risk reporting practices that the bank plans to have in place by the end of the upcoming fiscal year. In following the governance principle established by the Basel Committee for effective data aggregation and reporting, she should ensure that the practices she is documenting are:
A
written and put in place by the bank’s board of directors.
B
adaptable to any potential changes of location or legal organization.
C
reviewed and validated by independent individuals with IT and risk reporting expertise.
D
kept segregated from the data aggregation and reporting processes of any future acquired banks.
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