medium · Frm Part 2 Operational Risk
A bank's Risk Appetite Framework (RAF) defines a 'Zero Tolerance' zone for Sanctions breaches. On a 5 × 5 RCSA heat map, a business unit maps a Sanctions risk with an inherent score of 25 (Likelihood 5, Impact 5). They propose a residual score of 5 (Likelihood 1, Impact 5) based on a new automated screening tool.
What is the critical governance requirement for this mapping?
- The risk should be removed from the RCSA because it is now automated.
- The unit can self-approve the 'Green' status if the screening tool's vendor provides a certification.
- The residual risk must be formally accepted at the highest level of authority or remediated immediately if above appetite.
- The impact score should be lowered to 1 because the tool prevents the payment from being sent.
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