Framework development / expert review or internal audit support
Based on our extensive business intelligence and expertise, we facilitate our clients in the development of a fully integrated and leading-edge Basel II compliance framework to manage and assess their risks.
This framework is tailored to the type of approach selected, existing procedures in the institution, the culture and the risk profile of the organization and, when relevant, the guidelines issued by the parent company.
If a framework is currently implemented, we provide our clients with a review identifying improvement opportunities to enhance and align their risk management framework with best practices.
For instance, a typical risk management framework will include the following aspects:
- Business line mapping with Basel II hierarchy
- Operational risk management governance structure and processes
- Development of a structured and consistent taxonomy (organizational model, loss events model, risk factors model, indicators model)
- Implementation of an efficient and complete loss data collection process
- Development of an appropriate reporting system, and
- (for AMA only) Definition of the measurement approach (i.e. how to best integrate the four required elements of an advanced measurement approach (internal data, relevant external data, scenario analysis and business and control environment) according to the institution’s requirements
We also support internal audit functions in their framework reviews and validation duties as well as perform independent expert reviews of advanced measurement models (IRB, AMA, VaR, etc.) to challenge the quality and robustness of the modeling parameters and assumptions against best practices.
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