medium · FRM Part 2 Operational Risk
A bank's impact tolerance for 'Securities Lending' is defined as 'disruption exceeding 24 hours.' A scenario test shows that while the system can be recovered in 4 hours, it would take 30 hours to manually reconcile the data corrupted during the event.
What does this indicate?
- The bank is resilient because its recovery time of 4 hours is well within the 24-hour impact tolerance limit.
- The bank should revise its RPO target to 30 hours so it aligns with the manual reconciliation time seen in this scenario test.
- The bank has failed its impact tolerance because the end-to-end recovery time (34 hours) exceeds the 24-hour threshold.
- Reconciliation time is classified as indirect labor cost and is therefore excluded from formal resilience testing scope entirely.
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