The correct answer is B.

Enhancing risk management frameworks to comprehensively review various types of risks, including interest rate and liquidity risks, is vital. Additionally, understanding how rapid growth can affect a bank's risk profile is crucial, as seen in SVB's failure. This holistic approach ensures that the bank identifies and adequately prepares for potential risks.

A is incorrect. It is risky to emulate SVB’s business model without considering the specific risks that contributed to its failure. Focusing only on short-term profitability, as SVB did, can lead to the neglect of significant long-term risks.

C is incorrect. While external consultants can provide valuable insights, delegating the primary responsibility for risk management to them can lead to a lack of internal accountability and understanding. SVB's failure highlighted the need for robust internal risk management practices.

D is incorrect. Simply diversifying the customer base without revising risk management policies may not be sufficient. SVB's collapse demonstrated the importance of continually updating risk management practices to address changing risk landscapes, something that mere diversification cannot achieve on its own.

Things to Remember

• Board oversight and governance play a crucial role in the success or failure of a financial institution.
• Risk management frameworks should be dynamic and regularly updated to adapt to changing market conditions and regulatory requirements.
• Interest rate risk and liquidity risk are key components of a bank's risk profile that need to be carefully monitored and managed.
• Rapid growth can introduce new risks and challenges that may not have been previously considered.
• External consultants can provide valuable insights, but ultimate responsibility for risk management should lie with the internal teams.