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A risk manager is reviewing the inherent deficiencies that are commonly observed in risk management frameworks and assessing how risk management systems can be compromised by human agency. The manager focuses on cases involving conflicts of interest, which undermine the credibility of a risk management system. Which of the following is the best example of a conflict of interest?
A
The CRO of a bank provides oversight over the second line of defense of the bank.
B
A model developer is given responsibility for validating the soundness of the model.
C
A senior economist at a regulatory agency helps draft a proposal for a market reform and also advises on trading regulation for the government.
D
The head of a business unit of a bank petitions to the risk committee for a temporary risk limit increase for that unit.