The Central Bank has today published the outcome of a themed review to assess the operation of the risk function

Read the letter to industry here. 

The Central Bank has today published the outcome of a themed review to assess the operation of the risk function by reviewing risk frameworks and risk culture across Investment Firms, Fund Service Providers and Stockbrokers.

The main findings of the review are:
• There is a divergence in the quality and effectiveness of risk frameworks. 
• There were notable inconsistencies and deficiencies in how firms’ approach to identification of risks, documenting risks, quantifying risks, mitigating risks and communicating these risks within the firm. 
• good practices identified in the firms’ documentation are not always evident in the operations of the business.

The Central Bank would encourage all boards to consider how it is addressing these aspects of the risk management framework.  Where issues have been identified with individual firms the Central Bank will follow up directly with firms concerned to address these issues.