Assessment of internal control mechanisms and risk management processes

For the purpose of assessing risk management processes and internal control mechanisms, the coordinator should coordinate with the relevant competent authorities.

The competent authorities should provide the coordinator with relevant information regarding their assessment of the risk management processes and internal control mechanisms of regulated entities (whether at individual or subconsolidated level), material deficiencies identified, and the methodologies used in performing their assessments.

The coordinator should discuss the individual assessments and the overall assessment with relevant competent authorities in order to:

• a) assess the suitability of sectoral risk management and control mechanisms for mitigating the conglomerate’s material risks and identifying potential contagion channels; and
• b) reach a consistent view among the competent authorities involved on the financial conglomerate’s risk management and controls systems.