RISK APPETITE FRAMEWORK AS A CHANCE TO IMPROVE BANK’S RISK GOVERNANCE

Abstract

These are only some examples of the reproaches of supervisory authorities to credit institutions. Thus, the Financial Stability Board (FSB) elaborated the “Principles for an Effective Risk Appetite Framework” in November 2013 to specify requirements, which should counteract these deficiencies. However, many credit institutions have not yet efficiently eliminated these deficiencies. Therefore, the Single Supervisory Mechanism (SSM) and the annual Supervisory Review and Evaluation Process (SREP) prioritize internal governance and risk management as separate aspects during audits.