For any organization, governance is at the same time a factor of efficiency and security. During the financial crisis it appears clearly that banks’ internal governance was not strong enough to allow an efficient and adequate identification and management of emerging risks. Based on this assessment, BCBS and EBA have been working on, and have implemented detailed guidelines on internal governance expectations. They have as well significantly raised the level of expectations through the definition of risk management principles with a strong focus on governance.
MLAdvisory can help banks to assess and adjust their Risk and Finance internal governance in order to be more efficient and bring security to their operations. To do so we leverage on our extensive knowledge on regulation, our various assignments conducted around this topic and our visibility on best practices. As each bank is different in its organization, maturity or governance we make sure we adjust our proposals to the specificities of our clients.
Assignment example :
- Objective: reinforce the internal regulatory reporting supervision process between Risk and Finance in a context of a very fragmented organization around regulatory production and adjust roles and responsibilities between risk and finance teams around the process of production of regulatory indicators.
- Proposal: we conducted a review of the roles and responsibilities around regulatory indicator production and the process of data management. We proposed the implementation of a cumulative sign-off process (from data producer to indicator owner to CFO and CRO) on regulatory indicators (proposed by EBA to supervisors) with a better regulatory alignment of responsibilities between the 1st line and the 2nd line of Defence and a stronger investment of Business Lines.
- Benefits: clarity of expectations towards all actors involved, more accountability at each level of the production process, improvement of awareness on regulatory production issues and limits, better internal supervision of regulatory reporting, better continuous improvement monitoring of issues identified.