The supervisory framework: Building a stronger defense

03/15/17

As risk management frameworks for managing financial risks have become more developed, regulators are increasingly focusing on supervisors’ (e.g., desk heads and senior traders) ability to monitor non-financial risks. Not only are supervisors expected to monitor such risks, but they must do so while meeting (or exceeding) revenue expectations. As such, many financial institutions have adopted a front office central supervision team (CST) to assist supervisors.

The CST strengthens a supervisory framework by taking over the initial review of tasks associated with non-financial risks, while still bringing any material issues to a supervisor’s attention. Importantly, supervisors maintain accountability over all risks but are better able to filter through the noise to get to the real issues, allowing them to spend more time serving clients and focusing on meeting revenue goals.

Ahead we take a closer look at how financial institutions are defining their supervisory framework and using a CST to enhance their non-financial risk management practices.

A closer look

A publication of PwC's financial services regulatory practice

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Dan Ryan
US Financial Services Advisory Leader
Tel: +1 (646) 471 8488
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Armen Meyer
Managing Director of Regulatory Strategy
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