Adequate Risk Measurement, Monitoring and Management Information Systems

Reports you receive from the bank’s management information system provide you with feedback on how well the bank’s risk management systems and processes are performing. For instance, reports provide you with information on the bank’s financial position and whether it is meeting performance targets. They provide you with information on the bank’s large exposures and instances where more intense monitoring and management action may be required.

Because of their importance in judging a bank’s risk taking and risk management, the reports you receive need to provide you with timely data on all of the bank’s material risk exposures. They must contain sufficient information to allow you to identify and assess adverse trends and the bank’s level of risk.

To be useful, reports should be in an easily understood, user-friendly format, providing information on key assumptions: data sources, policy limits, goals, objectives and benchmark comparisons where appropriate.

A bank’s monitoring practices and reports must address all of its material risks if the board of directors is to keep abreast of the bank’s risk exposures and the effectiveness of its risk management.
	True
	False	It is important that reports provide the board of directors with information that is relevant to their decision making, focusing attention on matters where exposures are greatest.