Explanation:
Under the Basel regulatory expectations, the purpose of governance and supervisory risk management in a bank's ORM framework is to develop robust governance policies and processes, ensuring that material risks are identified, measured, monitored, and managed in alignment with the firm's established risk appetite and tolerance.
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Q.35 Mr. Rihan, a risk specialist at Bank ABC, is presenting to the board of directors on the Basel regulatory expectations for the governance of an operational risk management Framework. What is the purpose of supervisory risk management in the ORM framework of banks in this context?
A
To create a paper trail of compliance activities.
B
To set model documentation standards, data quality expectations, and versioning criteria.
C
To develop robust governance policies and processes and manage material risks per the firm's risk appetite.
D
To oversee all the activities of banks.
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