Fed examiner calls on banks to rethink KRIs
Most banks fail to establish explicit link between KRIs and identified risk exposures
The key risk indicators (KRIs) banks have developed for operational risk often fail to offer a true picture of the institution’s underlying exposures, a senior US bank examiner has said.
“I wish I had a dime for every time an op risk person was told by a business manager to build a KRI model that just has this needle going up until it gets to a certain point,” Richard Cech, a senior bank examiner
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