Critical Success Factors for Developing a Risk Appetite Framework
- Ensure it reflects management and the board’s vision for the Bank
- Combines and integrates the strategy development and risk assessment processes
- Need strong leadership and support for the risk appetite development process
- Define risk appetite so that it articulates the actual risks the Bank can take and those it should avoid, including specific targets and tolerances
- Captures sufficient data to assess performance against its risk appetite
- Make sure risk appetite is consistent with the Bank’s control framework and capability
Notes from ERM in Banking Conference, Marcus Evans - NYC
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