Regulatory perspective: The Ethiopian Banking Authority (EBA) Corporate governance principles for Ethiopian Banks state that an effective risk governance framework requires robust communication about risk issues, including the Ethiopian bank’s risk strategy. APPLY INTEGRATED RISK MANAGEMENT FRAMEWORKAn integrated risk management (IRM) approach allows Ethiopian Banks to manage disparate risk types across the organization, top to bottom. This is taken from the NBE Guidance on supervisory interaction with Ethiopian Banks on risk culture and Regulators Corporate Governance principles for Ethiopian Banks. Quantitative risk appetite: Defining a Ethiopian bank’s risk capacity is a crucial step in developing a comprehensive and effective Risk Appetite Statement (RAS). Ethiopian Banks should develop forward-looking reporting capabilities to provide early warnings of any potential breaches of risk limits that may exceed the Ethiopian bank’s risk tolerance/appetite.

Source: Ethiopian News February 03, 2024 18:34 UTC