medium · FRM Part 2 Operational Risk
An operational risk manager identifies that a payments process has a Recovery Time Objective (RTO) of 4 hours and a Recovery Point Objective (RPO) of 15 minutes. The current IT architecture performs nightly backups and requires 24 hours to restore from the off-site facility.
Which statement best describes the risk status?
- The bank has effectively transferred this risk to the off-site storage provider, meeting Basel III operational resilience principles.
- The architecture meets the RPO through off-site storage but fails the RTO due to manual restoration delays.
- The architecture fails both resilience targets, creating significant exposure to both data loss and service downtime.
- The process is considered 'resilient' but not 'continuous,' as it can recover within a single business day.
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
- In the Bow-Tie analysis framework, where do 'Preventive Controls' sit relative to the oper
- A customer consistently deposits $9,800 in cash at three dif… — This behavior is a classic
- The Standardized Measurement Approach (SMA) formula is composed of two primary factors: th
- What is the regulatory treatment for 'Boundary Events' regarding capital requirements unde
- In the Standardized Measurement Approach (SMA), the Business Indicator (BI) serves as a pr
- Under a proper governance framework, 'Model Limitations' must be:
- If the bank had a poor loss history (LC > BIC), what is the impact on its capital?