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Financial Institution’s Risk Management Strategies Praised
A recent evaluation by the Bank of Guyana has revealed that a licensed financial institution in the country has effective risk management strategies in place. The institution’s board of directors and senior management have been commended for their oversight, policies, and procedures which ensure a safe and sound financial institution.
Effective Risk Management Systems
According to the report, the institution’s risk management systems are considered effective, with risks being controlled in a manner that does not require more than normal supervisory attention. The report noted that while there may be some minor weaknesses in risk management, these issues have been recognized and are being addressed.
Strong Internal Controls
The Bank of Guyana’s evaluation also praised the institution’s internal controls, which were found to be effective in maintaining the safety and soundness of the financial institution. The report noted that the institution’s policies and procedures are designed to ensure compliance with regulatory requirements and to mitigate risks.
However, the report did identify some areas for improvement, including the need for more robust risk management systems and better internal controls. These issues were highlighted as potential risks to the safety and soundness of the financial institution if not addressed promptly.
Recommendations for Improvement
The Bank of Guyana’s findings are based on a comprehensive evaluation of the institution’s risk management practices, which included an assessment of its strategic planning, risk monitoring, and reporting processes.
Response from Board of Directors and Senior Management
In response to the report, the board of directors and senior management of the licensed financial institution have committed to addressing the identified weaknesses. The findings of the report will be discussed with the board of directors and senior management, who will work together to implement corrective actions.
Risk Governance and Risk Management Questions for Board Members
To support the risk governance and risk management practices of the licensed financial institution, the Bank of Guyana has provided a set of questions that board members can ask senior management. These questions cover areas such as strategic planning, risk management processes, and risk monitoring and reporting.
Here are some examples of the questions:
- What are the licensed financial institution’s key business risks as a deposit-taking institution?
- How does senior management ensure that risk management is an integral part of the planning and day-to-day operations of individual business units?
- How do board members ensure that their expectations for risk management are communicated to and followed by management and employees?
By asking these questions, board members can gain a better understanding of the licensed financial institution’s risk management practices and provide effective oversight to ensure the safety and soundness of the institution.