Financial Risk Manager Part 2
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A large global bank recently held an internal workshop to develop a set of scenarios involving extreme operational risk events. An internal auditor at the bank reviews the process used to develop scenarios at the workshop as well as some conclusions drawn by the workshop participants. Which of the following would the auditor find to be most reasonable and aligned with best practices?
A
Participants began the workshop by reviewing a set of scenarios provided by an external industry source and used these as a guide to generate the scenarios discussed in the workshop.
B
Participants assigned a high probability to the occurrence of a severe new pandemic in the future given that one had occurred in the previous year.
C
Participants consolidated two scenarios in which different external events caused the same impact on the bank's infrastructure into a single scenario.
D
Participants emphasized scenarios arising from external causes, such as geopolitical crises and cyber-attacks, as losses from internal causes were considered to be unlikely.