Basel Committee on Banking Supervision 239 (BCBS 239)
Active since: January 2016
Target: Global Systametically Important Banks & Domestic Systametically Important Banks
Goal: Strengthen banks in their risk assessing and reporting practices in order to enhance their risk management and decision making process.
During the global financial crisis from 2007 onwards, it became apparent that the bankings systems were not sufficient enough to rapidly report the financial risk across business lines and legal entitiesl
As a response the Bank for International Settlements in Basel set up a list of IT requirements for financial institutions.
The document contains a set of 14 principles that should enhance the risk management and decision making processess at banks. Examples of these principles are:
- A bank's risk data aggregation capabilities and risk reporting practices should be subject to strong governance arrangements consistent with other principles and guidance established by the Base Committee.
- A bank should be able to generate aggregate risk data to meet a broad range of on-demand, ad hoc risk management reporting requests, including requests during stress/crisis situations, requests due to changing internal needs and requests to meet supervisory queries.
- The board and senior management (or other recipients as appropriate) should set the frequency of risk management report production and distribution. Frequency requirements should reflect the needs of the recipients, the nature of the risk reported, and the speed, at which the risk can change, as well as the importance of reports in contributing to sound risk management and effective and efficient decision-making across the bank. The frequency of reports should be increased during times of stress/crisis.
- Supervisors should cooperate with relevant supervisors in other jurisdictions regarding the supervision and review of the principles, and the implementation of any remedial action if necessary.