OSFI.CorpGov Flashcards

1
Q

FRFI stands for..?

A

Federally Regulated Financial Institution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define ‘corporate governance

A

Set of relationships between: Board of Directors, management, shareholders and other stakeholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Identify 2 characteristics of good corporate governance

A
  1. Incentivizes good behaviour

2. Enables monitoring of operations & performance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Contrast the roles of the Board of Directors and Senior Management

A
Board of Directors:
1. Direction-setting
2. Oversight of management
Senior Management: 
1. Implement Board of Directors decisions
2. Oversight of operations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Briefly explain the role of corporate governance in OSFI’s supervision (2)

A

OSFI relies on good Corporate Governance to support its supervisory role

OSFI requires BoD involvement during interventions to determine best corrective actions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

identify 2 functions of the CRO (Chief Risk Officer)

A

Part of Senior Management, thus:

  1. Implement risk management policy
  2. Provide regular reports
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Identify and describe 2 items that should be included in the design of a Risk Appetite Framework (RAF)

A
  1. Risk Appetite Statement:
    Reflects the level of risk and type of risk FRFI is willing to accept to meet
    business objectives
  2. Risk Limits
    Refers to allocations of FRFI’s RAS to:
    • Risk categories (IMCO)
    • Business unit
    • LOB or product
  3. Roles & Responsibilities of those implementing the RAF
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Identify the 4 key features of the risk appetite statement

A
  1. Relate to short & long term strategies
  2. Includes qualitative / quantitative measures of risk
  3. Forward-looking
  4. Consider normal and stressed scenarios
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Briefly explain the qualitative and quantitative measures within the risk appetite statement

A

QUALITATIVE:
Identify significants risks company wants to take/avoid + why

QUANTITATIVE:
Measures of ECL (earnings, capital, loss) FRFI is willing to accept

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How is compliance with risk appetite framework ensured? (3)

A

CRO:
1. Ensures risk limits are CONSISTENT with risk appetite statement
2. Provides reports to BoD & SnrMgmt ASSESSING risk limits and risk
appetite statement

INTERNAL AUDITOR:
3. Ensures COMPLIANCE with risk appetite framework

How well did you know this?
1
Not at all
2
3
4
5
Perfectly