• Bank risk management rules approved by MB

    0

    Universal and commercial banks (UBs/KBs) have been ordered to create separate bodies and appoint officers to oversee risk management in accordance with amended governance rules, the Bangko Sentral ng Pilipinas (BSP) said.

    Advertisements

    It said that BSP-supervised financial institutions (BSFIs) need to create a separate risk management function that will primarily assist management in meeting their responsibility to understand and manage risk and ensure the development and consistent implementation of risk policies, processes, and procedures.

    “The risk management function shall be responsible for overseeing the risk-taking activities across the BSFI, as well as in evaluating whether these remain consistent with the BSFI’s risk-appetite and strategic direction,” it said in a circular released on Thursday.

    Branches of foreign banks can establish their own risk management function or be covered by the parent/regional/group risk management function, provided that all branches meet applicable provisions and comply with the policies, practices, and systems of the head offices.

    The boards of thrift, rural, and cooperative banks, can, at their own discretion or as directed by the appropriate supervising department of the BSP, also create a risk management function.

    BSFIs performing quasi-banking functions declared as complex by the Bangko Sentral should also create a separate risk management function to assist.

    Big banks also have to appoint a chief risk officer (CRO) to head the risk management function, while other banks, may at their own discretion, or as directed by the appropriate supervising department of the central bank, appoint a CRO or any equivalent position.

    “The CRO shall have sufficient stature, authority, and seniority within the BSFI. He shall be independent form executive functions and business line responsibilities, operations and revenue-generating functions, and shall have access to such information as he deems necessary to form his judgement,” it said.

    Share.
    loading...
    Loading...

    Please follow our commenting guidelines.

    Comments are closed.