MORNBFI Vol. 1 - Planters Development Bank

APP. Q-4208.12.31be quantified in pesos. For example,numerous internal control deficienciesmay indicate excessive operational risk.3. Evaluating risk management todetermine whether FI systems andprocesses permit management to manageand control existing and prospective levelsof risk.The appropriate department of the SESwill discuss preliminary conclusionsregarding risks with FI management.Following these discussions, it will adjustconclusions when appropriate. Once therisks have been clearly identified andcommunicated, it can then focussupervisory efforts on the areas of greaterrisk within the FI, the consolidated bankingorganization, and the banking system.To fully implement supervision by risk,the appropriate department of the SES willalso assign CAMELS ratings to the lead FIand all affiliated FIs. It may determine thatrisks in individual FIs are increased,reduced, or mitigated in light of theconsolidated risk profile of the FI as awhole. To perform a consolidated analysis,it obtain pertinent information from FIs andaffiliates, and verify transactions flowingbetween FIs and affiliates.(Circular No. 510 dated 03 February 2006)Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsAppendix Q-42 - Page 5