Revised DB role

Question 1

What triggered the risk assessment for DB?

Answer 1

DB received a consent order from the Federal Reserve of America due to a lack of granularity in their data and risk assessment processes. This required DB to improve its risk management to satisfy the Federal Reserve

Question 2

What is the purpose of the risk assessment conducted by PwC for DB?

Answer 2

To ensure DB has a comprehensive assessment of risks affecting its operations, to break risks down granularly, and to demonstrate that controls are in place to manage these risks effectively to align with regulatory expectations.

Question 3

What are the 3 staged of the risk assessment process applied to DB?

Answer 3

1. Inherent Risk: Assess risks without any controls in place.
2. Control Environment: Evaluate controls and their effectiveness in mitigating risks.
3. Residual Risk: Identify remaining risks after applying controls and determine if they align with the bank’s risk appetite.

Question 4

What is the trade finder tool ? And what part of the risk assessement do we use this for?

Answer 4

The Trade Index is a tool used by DB to:

• Evaluate risk types like insider trading.
• Link these risks to the control environment to assess how effectively the controls mitigate the risks.
• Ensure the residual risk is accurately measured.

We use this for the control enviornment.

Question 5

Where will i be looking at the risk assessment for?

Answer 5

FIC it has 255,000 data nods

Question 6

What are the business areas involved in the risk assessment at DB?

Answer 6

PB ( Private Bank)
CB ( Central Bank )
O&N ( Origination and Negoitation

Question 7

What is FIC?

Answer 7

FIC focuses on trading and investment activities related to fixed-income securities (e.g., bonds) and currency markets.

Question 8

What is PB?

Answer 8

Private Banking involves offering wealth management and investment services to high-net-worth individuals.

Question 9

What is O & N?

Answer 9

refers to the process of initating deals and negoitating terms for financial products, typically in investment or corporate banking.

Question 10

What are the sub businesses under FIC?

Answer 10

1) GFX ( Global foreign exchange
2) GBT ( Global Banking and credit trading )
3) GEM ( Global Emerging Markets )

Question 11

What is the importance of jurdisctions in the risk asssessment?

Answer 11

Different jurisdictions (countries or regions) have unique regulatory frameworks. For DB, the risk assessment must account for risks in:

• Where products are sold (desk-level risks).
• The specific regulations of each jurisdiction

Question 12

What does desks mean?

Answer 12

It refers to a specialised teams or units withing the financial insitution that handles speicific financial products, markets, services e,g, equity desk, dervivatives desk.

Question 13

What is GFX ( Global foreign exchange

Answer 13

Refers to the trading of currencies in the global foreign exchange market, facilitating, international trade, investments and currency risk management.

Question 14

What is GBT ( Global Banking and credit trading )

Answer 14

A division in banking that provides corporate banking services and focuses on trading and managing credit-related financial products like loans and bonds

Question 15

3) GEM ( Global Emerging Markets )

Answer 15

A banking and trading division that focuses on investment and financial services in developing economies with high growth potential but higher risk

Question 16

What has happened to date / in terms of risk assessessment?

Answer 16

The team assessed the inherent risk for every business unit. Each business was given a list of potential risks, e.g. insider trading, and was asked to rate the risk, and explain their rational. Then these risks are mapped to controls are has been done in the background (overlay with control environment, checking how well the rules, and processes reduce this risk). Then after the considering the effectiveness of the controls the residual risk is determined. e.g. a business rates insider trading as critical but with strong controls in place, the tool shows that thsi risk is effectively reduced to important.