5.6 Review and Independent Validations

Effective from 2020-10-17 - Oct 16 2020
To view other versions open the versions tab on the right

The ILAAP shall be subject to a regular internal review, at least once a year, taking into consideration the following:
i.	Both qualitative and quantitative aspects, including, for example the use of ILAAP outcomes, the stress-testing framework, risk capture, and the data aggregation process.
ii.	Establishing a defined process to ensure proactive adjustment of the ILAAP to any material changes that occur, such as entering new markets, providing new services, offering new products, or changes in the structure of the bank.
iii.	Adequately back-testing and measuring the performance of the ILAAP outcomes and assumptions, covering, for example, liquidity planning, scenarios, and risk quantification.
iv.	Conducting a regular independent validation of the ILAAP risk quantification methodologies, taking into account the materiality of the risks quantified and the complexity of the risk quantification methodology. The overall conclusions of the validation process should be reported to Senior Management and the Board of Directors, used in the regular review and adjustment of the quantification methodologies, and taken into account when assessing liquidity adequacy.