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.
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