easy · Frm Part 2 Operational Risk
A business unit head argues that they don't need to perform an RCSA because 'we haven't had a loss in five years.'
As a risk officer, how do you refute this?
- Explain that 'no losses' is a lagging indicator and doesn't account for future exposure or 'near-misses.'
- Tell them that RCSA is a mandatory accounting rule for tax purposes.
- Show them the firm's stock price as evidence that they are wrong.
- Agree with them, as realized losses are the only true measure of risk.
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