After 13 Years, Compliance with the BCBS Risk Data Principles Is Incomplete

BCBS 239 was a post-financial crisis landmark for bank risk management and its oversight. The Basel Committee on Banking Supervision’s January 2013 document contained 14 principles for effective risk data aggregation and risk reporting (RDARR) – 11 for systemically important banks and three for supervisors – and gave the institutions three years to comply.

Ten years past that deadline, the job is still not done. The Basel Committee, which through 2023 issued seven detailed reports on how far and on which principles the banks had progressed (or fell short), in January this year acknowledged ongoing complications while offering what amounted to a friendly reminder..

“The BCBS 239 principles,” said this latest newsletter, “provide a strong framework for bank data and risk management practices, initially targeting systemically important banks and applicable both at the banking group level and on a subsidiary level . . . The Basel Committee remains committed to fostering dialogue between supervisors and the industry to address ongoing challenges and advance the effective implementation of BCBS 239.”

Meanwhile, the European Central...