FSB strengthens risk management supervision

James Langton The principles were first issued for public consultation in July. The FSB says that respondents generally supported the overall direction of the draft principles, but sought more clarity on the extent to which a financial institution’s risk appetite should be attributed to individual legal entities and business units. The guidance is being issued for comment. The FSB is seeking feedback on the proposed guidance by Jan. 31, 2014. The FSB says that these papers form part of its initiative to increase the intensity and effectiveness of supervision, which, it says, is key to its efforts to address the “too big to fail” problem. It notes that supervision of firms’ risk management functions and overall risk governance frameworks was lacking in many financial institutions during the global financial crisis. “The principles and guidance aim to support well-informed and forward-looking risk decisions by institutions, and to assist the understanding, by both the financial institution and the supervisor, of the institution’s risk culture, in particular whether it supports appropriate behaviours and judgments within a strong risk governance framework,” said Julie Dickson, superintendent at the Office of the Superintendent of Financial Institutions (OSFI) and chair of the FSB Supervisory Intensity and Effectiveness Group. Translating climate risks into financial risks takes work The Financial Stability Board (FSB) issued papers Monday that are designed to help regulators in their efforts to strengthen risk management practices at financial institutions, in the wake of weaknesses exposed by the global financial crisis. The papers include a final set of principles for an effective risk management framework; and, proposed guidance for regulators that aim to help them assess the risk culture at financial institutions. How should banks allocate capital for crypto? Keywords Banking industryCompanies Financial Stability Board Related news Facebook LinkedIn Twitter OSFI seeks to step up sector’s cyber resilience Share this article and your comments with peers on social media

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