easy · FRM Part 2 Operational Risk

A bank sets its impact tolerance for 'Atmospheric Carbon Credit Trading' at 'no more than 24 hours of disruption.' This service uses a niche vendor for price discovery. If the vendor fails, the bank has no alternative source. In the resilience framework, this situation is termed:

1. An acceptable residual risk as long as the vendor has a high credit rating.
2. A 'Standardized Approach' to vendor management under Basel III.
3. A concentration risk that creates a single point of failure (SPOF).
4. A 'Strategic Risk' that sits outside the scope of the operational resilience framework.

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