16 December 2015

BCBS: Third progress report on bank's adoption of risk data aggregation principles issued by the Basel Committee

The Basel Committee on Banking Supervision (BCBS) issued a progress report on banks' adoption of the Committee's Principles for effective risk data aggregation and risk reporting.

Published in 2013, the Principles aim to strengthen risk data aggregation and risk reporting at banks to improve their risk management practices and decision-making processes. Firms designated as global systemically important banks (G-SIBs) are required to implement the Principles in full by 2016.

The report shows that G-SIBs are increasingly aware of the importance of their overall preparedness to comply with the Principles and have moved towards implementing the Principles. Nevertheless, important challenges remain and it is expected that some banks will still not meet the Principles on time. This report makes additional recommendations to promote adoption of the Principles, including:

• Supervisors should conduct more in-depth/specialised examinations on data aggregation requirements to evaluate weaknesses;
• Banks should have governance arrangements in place for manual processes; and
• Banks' compliance with the Principles should be subject to an independent evaluation in early 2016.

The Principles apply initially to all global systemically important banks. In addition, the Committee recommends that national supervisors apply the Principles to institutions identified as domestic systemically important banks three years after their designation.

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