Risk appetite / Risk team structure [17]

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Bullet points include: Effective risk appetite framework (RAF) should: Include process for communication, be both top down and bottom up, facilitate embedding of risk appetite into firm’s risk culture, act as a brake against excessive risk-taking, promote robust discussion and challenge and adapt to changing business and market conditions Risk limits: Should be set at a level to constrain risk-taking within risk appetite, be established for business lines and legal entities, generally be expressed relative to earnings, capital, liquidity or other relevant risk measures, include material risk concentrations and be monitored regularly Should not be strictly based on comparison to peers, default to regulatory limits, be overly complicated, ambiguous or subjective

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