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Risk Appetite and Risk Management Framework
Manage episode 448446244 series 3303439
Mark Treichel and Mark Treichel's Credit Union Exam Solutions에서 제공하는 콘텐츠입니다. 에피소드, 그래픽, 팟캐스트 설명을 포함한 모든 팟캐스트 콘텐츠는 Mark Treichel and Mark Treichel's Credit Union Exam Solutions 또는 해당 팟캐스트 플랫폼 파트너가 직접 업로드하고 제공합니다. 누군가가 귀하의 허락 없이 귀하의 저작물을 사용하고 있다고 생각되는 경우 여기에 설명된 절차를 따르실 수 있습니다 https://ko.player.fm/legal.
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1. Risk Management Framework Components:
- Risk Culture - Established by board and management, sets tone from top
- Risk Appetite - Formal statements and limits that define acceptable risk levels
- Risk Management System - Including the three lines of defense
2. Risk Appetite:
- Should be commensurate with institution's size and complexity
- Must be supported by capital levels
- Requires clear metrics and reporting systems
- Needs documented processes for when limits are approached or breached
- Should be consistently communicated throughout organization
3. Three Lines of Defense:
- First Line: Front-line business units conducting transactions and operations
- Second Line: Risk management department (in larger institutions) led by Chief Risk Officer
- Third Line: Internal audit function testing controls and verification
4. Key Risk Management Principles:
- Risk management culture is foundational to effectiveness
- Smaller institutions can accomplish goals without full three lines structure
- Need to avoid managing risks in silos
- Importance of aggregating risks across organization
- Chief Risk Officer role should support but not have veto power
5. Best Practices:
- Document and communicate risk appetite clearly
- Establish appropriate metrics and reporting
- Have action plans for when limits are approached
- Ensure staff feels comfortable raising risk concerns
- Maintain independence of risk oversight functions
6. Resources Available:
- OCC Director's Reference Guide contains useful guidance on risk governance
- Includes questions to consider and potential red flags
- Contains comprehensive references on risk and corporate governance
The episode emphasized that while sophistication levels vary by institution size, core risk management concepts remain consistent and should be applied appropriately based on each credit union's specific circumstances.
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