BCBS 239 - Explained
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BCBS 239 establishes principles for effective risk data aggregation and reporting in response to weaknesses revealed after the global financial crisis. It sets baseline expectations for all systemically important banks to improve data management capabilities and risk reporting practices through four pillars: risk data aggregation, data governance and infrastructure, risk reporting, and supervisory review. The goal is to promote global financial stability by empowering local regulators to hold banks accountable for adhering to the 14 principles that constitute better practices for risk management culture, data quality, and regulatory cooperation.
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BCBS 239 - Explained
- 1. BCBS 239 Mitigating Systemic Risk Through Better Data ● Borne out of the GFC post-mortem ● High-quality data & effective risk reporting – vital to health and stability of the financial system as a whole ● Risk Management culture & practices – rigor varied, weaknesses revealed ● Degree of risk reporting sophistication – fundamental inconsistencies identified ● Data Management capabilities – fits and starts across the industry, wide spreads in maturity levels. Control gaps exposed The 4 Pillars of BCBS 239 ● Sets baseline expectations of all SIBs for Effective Risk Data Aggregation and Reporting ● Empowers local Regulators to hold SIBs accountable for adherence to the Principles ● Ultimate goal is to promote Global Financial Stability and head-off another Financial Crisis ● Beyond compliance, there is a significant payoff for Banks aspiring to compete on Data Analytics Risk Data Aggregation Data Governance & Infrastructure Risk Reporting Practices Supervisory Review Tools & Cooperation - Apply to Regulators - ● Constitute a set of 14 Principles ● 11 Principles for SIBs, 3 for Supervisors