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BCBS 239

Authored by: Stuart Boland, Synechron Business Consulting

BCBS 239 is an ongoing directive and the regulators can (and will) be looking to inspect financial organizations to ensure that they are taking this directive seriously and are genuinely making strives to improve. The principles outlined in BCBS 239 are to some extent open to interpretation as how to apply them, however, they are good simple principles that should be applied front to back, not just to the risk functions and their ability to capture, aggregate and report risk data.

In any organization (not just within the financial services industry), they are just sensible rules to be taken into account when analyzing how any process works. Particularly in the banking industry, there is a tendency to over complicate things when in reality they can be explained in more simple layman's terms. Notwithstanding the fact that there are huge complex processes that require specialist knowledge to really understand the technology, mathematics and the transformation processes when dealing with financial data. This is no different than any other industry whether it be banking, engineering, research science or pharmaceuticals to name a few. They are all dealing with data, process, legal constraints and technology, albeit of a different nature. Learning to explain banking concepts in simple terminology allows us to join the dots. In essence that is partly what BCBS 239 helps with, by applying the basic principles.

BCBS 239 Principles

The basic components of BCBS 239 are put down in 14 principles in 5 sections:

  • I. Overarching governance and infrastructure
    • 1. Governance
    • 2. Data architecture and IT infrastructure
  • II. Overarching governance and infrastructure
    • 3. Accuracy and integrity
    • 4. Completeness
    • 5. Timeliness
    • 6. Adaptability
  • III. Risk reporting practices
    • 7. Accuracy
    • 8. Comprehensiveness
    • 9. Clarity and usefulness
    • 10. Frequency
    • 11. Distribution
  • IV. Supervisory review, tools and cooperation
    • 12. Review
    • 13. Remedial actions and supervisory measures
    • 14. Home/host cooperation
  • V. Implementation timeline and transitional arrangements

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