medium · FRM Part 2 Operational Risk
A bank finds that its current recovery time objective (RTO) for a critical ledger is 12 hours, but the board-mandated impact tolerance for the associated payment service is 4 hours.
How should the risk function address this discrepancy?
- The bank should reduce its recovery point objective (RPO) all the way to zero, which would render the 12-hour RTO figure entirely irrelevant.
- The bank should raise its impact tolerance to 12 hours so that it can avoid having to report a constant red-rated risk breach to the regulator.
- The bank must maintain the 4-hour impact tolerance and initiate a remediation plan to align internal capabilities with the required service outcome.
- The bank must simply accept the current 12-hour RTO as the de facto impact tolerance, since it reflects the existing technical frontier that is available.
Sign up free to see the explanation and track your rank →
More FRM Part 2 Operational Risk practice
- Which of the following describes the 'One Big Loss' principle for heavy-tailed (subexponen
- Under the current Basel Standardized Measurement Approach (SMA) for operational risk, whic
- Which of the following is NOT one of them?
- What is the marginal coefficient for the portion of the BI that exceeds 30 billion euros?
- According to standard regulatory definitions (such as SR 11-7), which three components are
- A material change to a model is most likely to be triggered by which event?
- How long is the historical window required for calculating the average annual operational
- In the Bow-Tie analysis framework, where do 'Preventive Controls' sit relative to the oper