ISC 2022

Which of the following is NOT the benefits of risk-based approach?

• Enable a consistent supervisory intervention measures for all financial institutions

• Facilitate identification of higher risk areas for effective and consistent risk assessment process

• Allow efficient allocation of resources

• Ensure measures to prevent and mitigate risk commensurate to the risk identified

Identify the correct order in implementing supervisory process cycle.

I. Report the supervisory assessment to the Central Bank's Management and communicate the supervisory risk assessment and issues to the FI

II. Conduct off-site monitoring and on-site reviews based on supervisory strategy

III. Perform thorough analysis to understand the institution's activities and operations and determine supervisory planning

IV. Follow-up on institution's response to each supervisory issues and update Central Bank's management of the remediation progress

V. Assess the institution's composite risk rating and assessment

• II, III, I, IV and V

• III, II, V, I and IV

• I,III,II,V and IV

• IV, I,V, II and III

What are the analysis that need to be conducted as the starting point for all supervisory activities? (Participants may choose more than one answer)

• Knowledge of Business

• Business Model Analysis

• Stress Testing

• Control Assessment

Which of the following statements are true? (Participants may choose more than one answer)

• Institutional Supervisory Planning should consider the key areas which will affect the institution’s safety and soundness and financial stability

• Institutional Supervisory Planning only includes planning for off-site monitoring

• Examples of on-site assessment includes engagement with insurers, walkthroughs and system validation

• Moderation session is held to challenge the supervisory assessment

What are the factors that would affect the inherent risk rating of a significant activity:

I. The profile of the portfolio

II. The size of the portfolio

III. The features of the products

IV. The internal controls applied

• I and II

• I and III

• I,II and III

• All of the above

Which of the following statements are TRUE? (Participants may choose more than one answer)

• Supervisors will assume both the on-site and off-site roles to provide a holistic view of the institutions under their purview.

• The frequency and depth of on-site reviews depends on the size, complexity and risk profile of the institution.

• Off-site monitoring only involves gathering relevant information and performing analysis, without engagement with the Board and Senior Management of the Financial Institution.

• All on-site activities must be full-scope reviews.

Which of the following is NOT one of the purposes of Rating Panel?

• Finalise the FI's CRR for the first time

• Confirm any change of CRR

• Confirm numerous changes in CRR components due to economic environment

• Brief Senior Management of the CRR assessment of a foreign reinsurers

Which document should supervisors use to communicate any supervisory concerns to FIs? (select all that apply)

I. Interim Supervisory Letter

II. Management Letter

III. CRR Letter

IV. Reprimand Letter

• I, II and III

• II and III

• I, III and IV

• All of the above

Which of the following is part of the review areas for Culture Assessment?

I. Tone from the Top

II. Echo from Below

III. CRR Letter

IV. Reprimand Letter

• I,II and III

• II and III

• I, III and IV

• All of the above

Which of the following best describes 'timely communication' to FIs?

• CRR Letter issued 25 days after the Board Communication

• Management Letter issued 60 days after the branch visit's exit meeting

• Interim Supervisory Letter issued 45 days after exit meeting