Shkendije Himaj’s Post

Central banks worldwide have now completed their surveys for the Risk Management Benchmark 2025. Initial commentary highlights trends in staffing within central banks' risk management divisions: https://hubs.li/Q03200fw0 This exclusive article from the Benchmarking Service provides Central Banking Institute members with valuable data and insights to enhance risk management strategies and meet global standards. Not a member? Join before the full Risk Management Benchmark report is published at the end of the month: https://hubs.li/Q031_-0F0 #riskmanagement #benchmarking #centralbanking

ECB Launches Consultation on Governance and Risk Culture On July 24, 2024, the European Central Bank (ECB) unveiled a draft Guide on governance and risk culture, inviting feedback from banks and stakeholders. This new Guide supersedes the 2016 supervisory statement, aiming to enhance internal governance and risk culture within banks. The Guide underscores the ECB's commitment to diverse, effective management bodies as a core priority of the Single Supervisory Mechanism (SSM). It details supervisory expectations, offering banks a clear roadmap for strengthening governance and risk management. Key points: - Management Composition and Function: Clarifying roles and responsibilities of internal control functions and management bodies. - Risk Culture Importance: Emphasizing robust risk appetite frameworks and decision-making processes. - Adherence to Updated Standards: Reflecting recent updates from the European Banking Authority (EBA) and showcasing good practices observed by the ECB. Past financial crises have highlighted the critical need for sound internal governance and risk culture. The ECB expects continuous improvement from banks, ensuring a balance between risk-taking and control to safeguard capital and operational resilience. #BankingSupervision #Governance #RiskManagement #FinancialStability #ECB #RiskCulture #BankingSector #Compliance #FinancialServices https://lnkd.in/etYrAWfd

📣 The ECB has just launched a public consultation on its new draft guide on governance and risk culture.   Unsurprisingly, we see that governance continues to be at the top of the ECB's (and national authorities') agenda and that the way forward is to intensify supervision in this area: “banks need to continue enhancing their implementation of governance standards, while the ECB will continue to intensify its scrutiny in order to take timely action to bring about concrete improvements in this area and to escalate non-remediated supervisory findings whenever relevant”.   📑 This draft guide offers a practical tool for all banks to assess their own governance and risk culture, setting guidelines, lists of red flag situations and observed good practices on fundamental issues such as:   ✔ the role of the management body in its management and supervisory functions, ✔management body composition, including collective suitability and diversity, ✔independence and conflicts of interest, ✔committees’ composition and their interaction with the management body, ✔management body and committee documentation, ✔internal policies, ✔internal control functions, including their interplay with the management body in its supervisory function, performance assessment, remuneration, appointment, resources, staffing, roles, responsibilities and processes, ✔risk appetite framework and its implementation ✔supervisory approach   A must-read for those in the banking sector! https://lnkd.in/d-DtFf-V

ECB consults on governance and risk culture ECB invites comments from banks and other stakeholders on draft Guide on governance and risk culture. Guide replaces 2016 supervisory statement, clarifies supervisory expectations and shares good practices for banks’ internal governance.

The European Central Bank has released its new Draft Guide on #governance and #RiskCulture, replacing the 2016 SSM Supervisory Statement. This guide emphasizes the importance of robust governance frameworks in risk management, highlighting the principle that "well-run banks mean safer banks". The guide aims to bolster the stability and #resilience of the #EU's #banking sector, ensuring a secure #financial system. The consultation period runs until 16 October 2024. For more details, read the full article here: https://lnkd.in/dADfgiCa #GTG #FinancialServices #Fintech #DORA #ECB #RiskManagement #RiskCulture Ian Gauci l Cherise Abela Grech l J.J. Galea

As the financial crisis and subsequent financial failings have shown, cohesive corporate governance and strong #Risk culture are at the heart of effective business practices and the top of the #Regulatory agenda. To emphasise this, on 24 July 2024, the European Central Bank (ECB) issued their draft guidance on governance and risk culture. This guidance sets out expectations of supervised banks in the form of a practical tool, inviting feedback from the industry by 16th October 2024. The ECB guidance outlines four key areas: 1. Governance and risk culture: importance for banks 2. Functioning and effectiveness of the management bodies 3. Internal control functions 4. Risk Appetite Framework Find out more 👉 https://lnkd.in/eKRZWvGM Kevin Coleman Amanda Ward Claire Miller Dwayne Price

Manage the metric or manage the risk? That may be the choice that ALM risk managers face in having to juggle both NII sensitivity and EVE regulatory threshold constraints. As the article shows, an increasing number of banks risk being deemed an 'outlier' thanks to a cocktail of: ➡ recently implemented NII sensitivity threshold, ➡ proposed re-calibration of regulatory shocks, and ➡ point in time yield curves and interest rate sensitivities When does being an 'outlier' become somewhat normalised? 🤔 Are the thresholds too tight? Are the shocks too large? Are banks taking too much risk? Certainly the proposed increase in shock severity to a 99.9% confidence level is a key factor in this equation, and perhaps the NII sensitivity threshold of 5% of Tier 1 capital needs to see a full cycle to be truly informed. No doubt banks can and will adapt to the circumstances they face, but I feel there is a danger in focusing too much on regulation by metric for what is typically a Pillar 2 risk. I think this should be more than complemented by the quality and rigour of internal governance and regulatory supervision to create effective risk management outcomes. Chris Heys Stewart Cummins Susie Thomas Guillaume Kalaydjian Renato Latorre Hongye Wei https://lnkd.in/e8rrWTZy

https://lnkd.in/etBatBbT #GARP shares insights at the recent #ECB’s approach for improving #Culture and #Risk Governance at European Banks.

Op Risk Benchmarking 2024: infosec risk remains in top spot for non-G-Sib banks https://hubs.li/Q02_zCXx0 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free, and allows you to read two articles a month: https://hubs.li/Q02_zKf10

In its latest newsletter, the ECB is calling for banks to make progress in risk data aggregation and risk reporting. The ECB emphasize the importance of effective data governance and high-quality risk data for well informed decision-making; and despite lessons from the global financial crisis, many banks still struggle with risk data aggregation and governance. On May 3, 2024, the ECB published a final Guide on risk data aggregation and reporting, outlining recommended practices for banks. While not imposing new requirements, the Guide aims to enhance risk management and reporting. Banks are expected to make substantial progress in implementing these practices promptly. The Guide does not limit supervisory follow-up activities