An internally generated measure of risk should be better than one derived from formulaic risk-weights generated by supervisors. There is, therefore, a strong case for supervisors to use the calculations developed by firms themselves, at least if they can be satisfied that the risk assessment model is adequately robust.
The board or a designated board level or management committee may take the lead in monitoring the bank’s progress in attaining sustainability objectives and ensuring that operations and personnel performance are consistent with these set objectives. Appropriate measures may be taken in case of breaches or noncompliance. The Framework also highlights transparency as sustainability objectives and policies should be clearly communicated across the institution.