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The CEO of a large bank has reported that the bank's framework for managing operational risk are consistent with Basel II and Basel III model for operation risk governance. Which of the following actions and principles of the bank is correct?
A
The bank considers identification and management of risk as the second line of defense.
B
The bank considers independent review and audit of the risk processes and systems as the third line of defense.
C
The bank includes damaged reputation due to a failed merger in its measurement of operational risk.
D
The bank excludes destruction by fire or other external catastrophes from its measurement of operational risk.
