Principles for effective risk data aggregation and risk reporting
One of the most significant lessons learned from the global financial crisis that
began in 2007 was that banks’ information technology (IT) and data architectures were
inadequate to support the broad management of financial risks. Many banks lacked the
ability to aggregate risk exposures and identify concentrations quickly and accura
tely at the bank group level, across business lines and between legal entities. Some banks were unable to manage their risks properly because of weak risk data aggregation capabilities and risk reporting practices. This had severe consequences to the banks themselves and to the stability of the financial system as a whole.