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Monitoring and reporting (Basic Principles of reporting (Report…
Monitoring and reporting
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Regulatory reporting
The PRA has also laid down requirements for explicit identification, measurement and monitoring to be carried out by firms.
The PRA states that the effective management of operational risk depends upon consistent and timely reporting of exposures.
They should address the top level objectives and show the reader the extent to which the risk management system is complying with the controls. They should go on from this to identify and enable the treatment on non- compliant areas where controls are not satisfactory.
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Loss Data Analysis
Internal Loss Data
Internal loss data is crucial for tying a bank’s risk estimates to its actual loss experience. This can be achieved in a number of ways, including using internal loss data as the foundation of empirical risk estimates, as a means of validating the inputs and outputs of the bank’s risk measurement system, or as the link between loss experience and risk management control decisions.
To qualify for regulatory capital purposes a bank’s internal loss collection processes must meet the following standards.
A bank must be able to map its historical internal loss data into the relevant level 1 supervisory categories.
It must have documented objective criteria for allocating losses to the specific business lines and event types.
External Loss Data
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It is helpful to see how your firm might cope with the problems that have been experienced by other people
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