Crackdown on risk budgets: Trader sign-off on revaluing data must end, says industry body

NEW YORK - The Professional Risk Managers' International Association (Prmia) is considering issuing guidelines recommending banks separate their risk management budgets from FX and other business lines.

No official advice currently addresses the problem, which can mean banks’ trading groups have ultimate veto on purchasing independent data or risk systems proposed by risk managers to mark traders’ options books to market.

"Risk management - for the oversight function at least - should be funded independently," David Koenig, chair of the board of directors at Prmia, told FX Week. "Budgets should be set at executive level, not at business-line level."

Koenig said that some institutions had

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