A recent recruit in training to become an examiner for a national banking supervisory authority has been assigned the duty of explaining the development of banking regulations following the 2007-2009 financial crisis and their role in enhancing risk governance. Which of the following most accurately reflects an impact of the regulatory changes that were implemented as a result of the crisis?

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Banks were required to securitize all the mortgages they originate in order to distribute risk across financial institutions.

9.4%

Banks were encouraged to establish an independent risk management function with access to the board of directors.

78.8%

Proprietary trading operations were merged with traditional banking operations to provide banks better governance over their trading desks.

5.9%

Derivatives were encouraged to be traded OTC rather than centrally cleared to provide greater transparency.

5.9%

Financial Risk Manager Part 1