Glossary term
Risk Data Aggregation and Reporting (RDARR)
Subject: Risk Management, Risk Fundamentals and Frameworks
Also known as: BCBS 239, Risk Data Aggregation
RDARR is a set of principles from the Basel Committee for how banks gather, manage and report risk data, so that boards can rely on accurate, timely risk information, including in a crisis.
Explanation
The Basel Committee issued it in 2013 as BCBS 239, after the financial crisis of 2007 to 2009 showed that many large banks could not quickly work out their total exposure to a single counterparty. It has fourteen principles in four groups: governance and infrastructure, risk data aggregation, risk reporting, and supervisory review. They ask for accurate, complete, timely and adaptable data, clear data ownership, and reports that can be produced on demand under stress. It applies first to global systemically important banks, and many national supervisors extend it to other large banks. Banks respond with data governance, data lineage, common definitions and automated reporting. Supervisors have reported slow and uneven progress. Banks unable to produce a group-wide exposure figure within hours are deciding in a crisis on partial information.
Example
On a Monday after a counterparty is rumoured to be failing, a global bank's board asks for its total exposure to that group across all subsidiaries. Trading, lending and treasury systems use different customer identifiers, so the answer takes four days and still has gaps. After a review, the bank builds one group identifier and an automated daily exposure report.
Not to be confused with
- Regulatory Reporting
- Regulatory reporting sends set returns to supervisors; RDARR is the internal ability to produce reliable risk data for any report, including the board's.