240. To achieve a comprehensive understanding of the institution's market risk profile, competent authorities should review the governance and risk management framework underlying its market activities. To this end, competent authorities should assess the following elements:
a. market risk strategy and risk appetite;
b. organisational framework;
c. policies and procedures;
d. risk identification, measurement, monitoring and reporting; and
e. internal control framework.
Market risk strategy and appetite
241. Competent authorities should assess whether institutions have a sound, clearly formulated and documented market risk strategy, approved by their management body. For this assessment, competent authorities should, in particular, take into account whether:
a. the management body clearly expresses the market risk strategy and appetite and the process for their review (e.g. in the event of an overall risk strategy review, or profitability and/or capital adequacy concerns);
b. senior man
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