BCBS 239
BCBS 239Also called principles for effective risk data aggregation and risk reporting, RDARR
BCBS 239 is the Basel Committee's set of 14 principles for effective risk data aggregation and risk reporting, published in January 2013. It expects banks to gather accurate, complete and timely risk data across the group and report it clearly to the board, including in a crisis. Global systemically important banks were due to comply from 2016.
How it works
Eleven principles apply to banks and three to supervisors. They cover governance and data architecture, aggregation accuracy, completeness, timeliness and adaptability, and the quality and distribution of risk reports. In practice banks name data owners, document data lineage from source to report, reconcile risk data to accounting data and test whether they can produce ad hoc reports under stress.
The principles grew out of the 2008 crisis, when many banks could not quickly see their total exposure to a failing counterparty. Supervisors still find most large banks short of full compliance. The ECB published a guide on risk data aggregation in May 2024 and treats weak risk data as a supervisory priority, which can feed into capital add-ons.
The rules
Sets 14 principles on risk data governance, aggregation and reporting, with G-SIBs expected to comply by January 2016.
Global systemically important banks, recommended by supervisors for domestic systemically important banksSets seven supervisory expectations built on BCBS 239, covering board responsibility, data lineage, data quality and timely risk reporting.
Significant institutions supervised by the ECBCommon questions
Is BCBS 239 a law?
No. It is a Basel Committee standard. Supervisors apply it through their own powers, for example the ECB in its supervisory review of significant institutions and the PRA in its supervision of large UK banks.
Which banks must comply with BCBS 239?
The principles were written for global systemically important banks, which were expected to comply from January 2016. The Basel Committee recommended that supervisors also apply them to domestic systemically important banks.
What is data lineage in BCBS 239?
Data lineage is the documented path of a data item from its source system through each transformation to the final risk report. Supervisors expect lineage for critical risk data so errors can be traced and fixed.
