Question

Given the many roles and functions that must be addressed in a Risk Management structure, it is important for banks to confirm that:

1. Roles and responsibilities are documented.
2. Discuss risk management realities with Senior Management.
3. Understand the compromises that are made.
4. Discuss Risk Management with the Board of Directors.

a. 1, 2, & 3
b. 1, 2, & 4
c. 1
d. 1, 2, 3, & 4

Answer 1

The correct answer is d. 1, 2, 3, & 4. A risk management structure in banks should include documented roles and responsibilities, discussions with Senior Management, understanding of compromises, and discussions with the Board of Directors.

Step-by-step explanation:

The correct answer is d. 1, 2, 3, & 4. In a risk management structure, it is important for banks to confirm that:

1. Roles and responsibilities are documented.
2. Risk management realities are discussed with Senior Management.
3. The compromises that are made are understood.
4. Risk Management is discussed with the Board of Directors.

Having clear documentation of roles and responsibilities helps ensure accountability within the risk management structure. Discussing risk management realities with Senior Management helps align efforts and strategies. Understanding the compromises made allows for informed decision-making. Lastly, discussing risk management with the Board of Directors provides oversight and strategic direction.