Organisations should develop and maintain strong risk data aggregation capabilities to ensure that risk management reports reflect the risks accurately.
- An organisation should be able to generate accurate and reliable risk data to meet normal and stress/crisis reporting accuracy requirements.
- An organisation should be able to aggregate all intercompany material risk data in real-time; with this data being available by business line, legal entity, asset type, industry, region and other groupings that permit identifying and reporting risk exposures, concentrations and emerging risks.
- An organisation should be able to generate risk reports to meet a broad range of on-demand, ad hoc risk management reporting requests, including during crisis situations.
Common problems/challenges with risk reporting and disclosure:
- Inherent unreliability: Bias seems to be a problem that is characteristic to manual risk reporting. It may pose difficulties in assessing the quality of risk reporting, and will certainly make it more difficult for users to know whether they are being provided with useful information.
- Costs exceed perceived benefits: such as the competitive costs of disclosure where competitors may use their weaknesses against
- Inability to report on liquidity risk, stress tests, and regulatory capital levels in real time
- Manual log reporting, incident management and subject profiling – time consuming.
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