The SEC reports that senior financial supervisors from 10 countries - collectively, the Senior Supervisors Group (SSG) - issued a report that evaluates how financial institutions have progressed in developing formal risk appetite frameworks and in building out highly developed IT infrastructures and firm wide data aggregation capabilities.

The report, Observations on Developments in Risk Appetite Frameworks and IT Infrastructures, concludes that while firms have made progress in developing risk appetite frameworks and have begun multi-year projects to improve IT infrastructure, considerably more work must be done to strengthen these practices. In particular, the aggregation of risk data remains a challenge, despite its criticality to strategic planning, decision making, and risk management.

The observations and conclusions in the report reflect the findings of initiatives undertaken by two SSG working groups. The risk appetite working group conducted a series of interviews with boards of directors and senior management of global financial institutions to gauge progress in risk appetite frameworks, while the working group that focused on IT infrastructure based its views on observations from a number of existing supervisory efforts.

    Participating Countries.   Taking part in the project:

Canadian Office of the Superintendent of Financial Institution _ _ _ French Prudential Control Authority _ _ _ German Federal Financial Supervisory Authority _ _ _ , Bank of Italy _ _ _ Japanese Financial Services Agency _ _ _ Netherlands Bank _ _ _ Bank of Spain _ _ _ Swiss Financial Market Supervisory Authority _ _ _ U.K.'s SFA _ _ _ U.S.'s  (i) Office of the Comptroller of the Currency, (ii) the SEC, (iii) Federal Reserve.

The SEC did not provide any links to the report.   [SEC Release, 12/23]