Explanation:
According to the Basel Committee on Banking Supervision (BCBS) principles for sound stress testing practices, the board of directors has the ultimate responsibility for the overall stress testing program. They must ensure that the framework is appropriate for the bank's risk profile. Senior management is accountable for the program's actual implementation, day-to-day management, and continuous oversight.
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Q.20 The senior management of the African Industrial Development Bank is reviewing the stress program post a severe financial crisis in Africa. With regard to the stress testing program, which of the following is most accurate?
A
Senior management is ultimately responsible for the overall stress testing program, whereas the risk department is accountable for the program’s implementation, management, and oversight.
B
The Chief Risk Officer is ultimately responsible for the overall stress testing program, whereas the risk department is accountable for the program’s implementation, management, and oversight.
C
The risk committee is ultimately responsible for the overall stress testing program, whereas the risk department is accountable for the program’s implementation, management, and oversight.
D
The board of directors is ultimately responsible for the overall stress testing program, whereas the senior management is accountable for the program’s implementation, management, and oversight.
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