Examiner-in-Charge School

Senior Management

Risk – the potential for loss or gain resulting from a specific action

Risk is okay.

Must learn and evaluate management’s view of risk.

Does management understand the risk they are taking and what could go wrong?

Management must identify, measure, monitor and control risk.

Do they have the balance sheet to take on this level of risk?

Component Rating Definitions

The capability of the board of directors and management, in their respective roles, to identify, measure, monitor, and control the risks of an institution’s activities and to ensure a financial institution’s safe, sound, and efficient operation in compliance with applicable laws and regulations is reflected in this rating.