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Answer: It will help the bank optimize its allocation of resources to its most important business services.
An impact tolerance quantifies the amount of disruption that could be tolerated by the bank in the event of a severe but plausible incident. By setting an impact tolerance, the firm is identifying its most crucial operational processes and can then allocate its resources towards these processes with the goal of remaining within the impact tolerance range. This helps the bank to optimize its allocation of resources to its most important business services, ensuring that it can continue to operate effectively even in the face of potential disruptions. It is not about preventing failures but rather managing the level of disruption that the bank can withstand.
Author: LeetQuiz Editorial Team
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In the context of improving a bank's operational resilience, how might establishing an impact tolerance, as recommended by the consultant, benefit the institution?
A
It will enhance the bank's ability to identify and limit concentration risk.
B
It will accurately estimate the severity of a potential disruption to an operational process and the amount of downtime that would result.
C
It will help the bank optimize its allocation of resources to its most important business services.
D
It will prevent failures of critical operational processes and the systems that support these processes
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