The current supervisory practice toward risk management

Question

Quizplus · Accepted Answer

The supervisory practice toward risk management evaluates the soundness of a bank's risk-management process, which includes assessing the effectiveness of the bank's risk identification, measurement, and mitigation strategies. It is not possible or desirable to eliminate all risk, and while capital requirements are important, they are not the sole focus of supervision. The quality of a bank's balance sheet may be an important consideration, but it is not the primary focus of supervisory practice toward risk management.

The Current Supervisory Practice Toward Risk Management