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Progress in adopting the “Principles for effective risk data aggregation and risk reporting”

Summary:
The Basel Committee on Banking Supervision issued the fourth report on Progress in adopting the principles for effective risk data aggregation and risk reporting. The Committee's Principles for effective risk data aggregation and risk reporting, published in January 2013, aim to strengthen risk data aggregation and risk reporting practices at banks to improve their risk management practices, decision-making processes and resolvability. They are applicable to firms designated as globally systemically important banks (G-SIBs). Firms identified as G-SIBs in 2011 and 2012 were required to fully adopt the Principles by January 2016. The report reviews G-SIBs' progress in implementing the Principles in 2016 and is based on results of a self-assessment survey completed by authorities having supervisory responsibility for G-SIBs. Self-assessment surveys completed by G-SIBs had formed the basis of the previous progress reports. The report notes that, while some progress has been made, most G-SIBs have not fully implemented the Principles and the level of compliance with the Principles is unsatisfactory. The report found that G-SIBs' level of compliance with the Principles is unsatisfactory, notwithstanding that G-SIBs have made some progress in implementing the Principles in 2016.

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The Basel Committee on Banking Supervision issued the fourth report on Progress in adopting the principles for effective risk data aggregation and risk reporting.

The Committee's Principles for effective risk data aggregation and risk reporting, published in January 2013, aim to strengthen risk data aggregation and risk reporting practices at banks to improve their risk management practices, decision-making processes and resolvability. They are applicable to firms designated as globally systemically important banks (G-SIBs). Firms identified as G-SIBs in 2011 and 2012 were required to fully adopt the Principles by January 2016.

The report reviews G-SIBs' progress in implementing the Principles in 2016 and is based on results of a self-assessment survey completed by authorities having supervisory responsibility for G-SIBs. Self-assessment surveys completed by G-SIBs had formed the basis of the previous progress reports. The report notes that, while some progress has been made, most G-SIBs have not fully implemented the Principles and the level of compliance with the Principles is unsatisfactory.

The report found that G-SIBs' level of compliance with the Principles is unsatisfactory, notwithstanding that G-SIBs have made some progress in implementing the Principles in 2016. Among the G-SIBs subject to an implementation deadline of January 2016, only one G-SIB fully complied with the Principles within the deadline.

In view of the results and to promote further adoption of the Principles, the Committee has made the following additional recommendations:

  • Banks should develop clear roadmaps to achieve full compliance with the Principles and comply with them on an ongoing basis.
  • Supervisors should: (i) communicate the assessment results to their banks and provide the necessary incentives to achieve full compliance with the Principles; and (ii) continue to refine their techniques to assess banks' compliance with the Principles.

The Committee will continue to monitor the G-SIBs' progress in adopting the Principles. The Committee also strongly suggests that national supervisors apply the Principles to institutions identified as domestic systemically important banks three years after their designation as such.

International Settlement
The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

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