On 8 May 2018, the European Central Bank (ECB) published a report following its thematic review on effective risk data aggregation and risk reporting. The thematic review covered 25 significant institutions and assessed them against the Basel Committee’s principles for effective risk data aggregation and risk reporting (the Basel Committee principles).
The report notes that the outcome of the thematic review showed that the implementation status of the Basel Committee principles within the sample of significant institutions was unsatisfactory. None of them have so far fully implemented the Basel Committee principles and weaknesses stem mainly from a lack of clarity regarding responsibility and accountability for data quality. The ECB found that it was often difficult to understand what the roles and responsibilities of business, control and IT functions are, and how those roles are allocated and exercised.
The report also seeks to convey the lessons learnt from the thematic review, describing the key areas of concern and providing examples of observed good practices, in order to encourage credit institutions to implement robust supervisory standards, in line with international best practices.
The general conclusions set out in the report are without prejudice to the ECB’s assessment of the risk governance of individual credit institutions, which is conducted in the context of its ongoing supervisory work and takes account of the specificities of each entity in terms of the application of the relevant legal framework.