Financial Risk Manager Part 2
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The board of directors of a midsize bank has recommended that the bank improve its processes for managing operational risk. The CEO asks an enterprise risk manager to review the bank's tools and processes for managing operational risk and to suggest improvements that are consistent with Basel II and Basel III guidelines for operational risk governance. The bank also plans to adopt the new Basel III standardized approach (SA) to determine its regulatory capital for operational risk. Which of the following actions should the manager recommend that the bank take?
A
Use third-party outsourcing agreements to replace most internal controls performed by senior managers and business line managers.
B
Develop an internal approach to model the distribution of operational risk losses and use it to determine the bank's regulatory capital.
C
Require an independent review of the bank's operational risk management framework.
D
Designate the risk management function as the primary owner of risk exposures within the bank.