Regulators will continue to focus on the robustness of the risk framework across all three lines of defense – as a part of rulemaking and as an ongoing theme in enforcement actions. Focus on both novel, complex, long-term risks as well as basic, shorter-term risks (e.g., risks associated with the current rate outlook and mixed market signals impacting credit risk).Integrate critical challenges (e.g., escalation procedures, actions initiated, decisions made, and proof of altered/terminated paths based on risk determinations) into risk and governance frameworks.Stature Risk, Compliance, Information Security, and Audit comparably to other strategic functions, including the quality of autonomy, empowerment, and visibility.Demonstrate board and governance domain skills (e.g., this is key element of the SEC’s proposed climate and cyber rules).Regulators will expect board and senior managers to: As part of these expectations (and as part of supervisory focus and evolving regulatory reporting), regulators will expect increased and formalized documentation, mapping, ownership, and ongoing testing and monitoring of controls. Regulators will continue to look to demonstrable evidence of credible challenge and dynamic risk assessment and decisioning from both within and across the board and senior management.
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