Financial Risk Manager Part 2
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A local financial institution uses a three-tiered defense model to manage its operational risks. Presently, this institution is in the process of implementing an enterprise risk management (ERM) framework. The Chief Risk Officer (CRO) has decided to integrate the three-tiered defense model into the ERM framework's deployment. Furthermore, the CRO is committed to ensuring that the ERM framework faithfully represents the institution's risk appetite and risk culture. What actions should the CRO recommend the financial institution take?
A
The third line of defense should continuously monitor the bank's implementation of its ERM framework to ensure its effectiveness.
B
Business line managers, as part of the first line of defense, should have the authority to take on risk exposures within the bank's risk appetite limits.
C
The bank should implement a set of risk culture indicators as part of its ERM framework in order to accurately quantify the losses that could occur due to failures of risk culture.
D
As part of the second line of defense, the executive committee should perform an independent review of the bank's risk management framework