TraceRiskUncategorizedRisk Narratives

Risk Narratives

Risk Narratives are expected from regulators and examiners.  They are the “show me” vs “tell me” aspect of how your FI came to reach ints understadning of risk in a particular area.  Its critical to ensure that this narrative is socialized from Board to Baseline Staff.  In essence, How did we reach this conclusion and can our entire staff tell the same story of risk about it?


Items to consider in a risk narrative:

  • Inherent Risk
  • Residual Risk:
  • How we mitigate risk (brief description of controls):
  • Exceptions noted in last audit/exam (indicate date):
  • Gaps (differences between where we are and where we should be):
  • Corrective action taken:
  • Other factors regarding mitigation/controls:
  • Training: