Article 8: Group Risk Management
C 153/2018 Effective from 27/6/2018- Banks, for which the Central Bank is the primary regulator, who have significant group relationships including subsidiaries, affiliates, or international branches, must develop and maintain processes to coordinate the identification, measurement, evaluation, monitoring, reporting and control or mitigation of all internal and external sources of material risk across the group. The process must provide the Board with a solo and group-wide view of all material risks including the roles and relationships of other group entities to one another and to the Bank.
The methods and procedures applied by subsidiaries, affiliates and international branches must support risk management on a group-wide basis. Banks must conduct group-wide risk management and prescribe group policies and procedures, while the boards and Senior Management of subsidiaries and affiliates must have input with respect to the local or regional application of these policies and procedures and the assessment of local or regional risks.
- Where the Central Bank is not the primary regulator of a bank that is part of a Group and any element of its comprehensive approach to risk management is controlled or influenced by another entity in the group, the bank’s risk governance framework must specifically take into account risks arising from the Group relationship and clearly identify:
- Linkages and any significant differences between the Bank’s and the Group’s risk governance framework;
- Whether the bank’s risk management function is derived wholly or partially from Group risk management functions; and
- The process for monitoring by, or reporting to, the Group on risk management.
- Linkages and any significant differences between the Bank’s and the Group’s risk governance framework;