Which of the following establishes organizational checks and balances with a proper segregation of front, back, and middle office functions for effective risk management?
Risk governance involves establishing a framework for managing risk across an organization. It includes the setting of policies, procedures, and responsibilities to ensure that risks are properly managed at all levels of the organization. A key aspect of risk governance is the segregation of duties between the front, back, and middle office functions, ensuring that no single function has too much control or influence over risk management processes. This helps in creating organizational checks and balances and ensures effective risk management.
BABOK v3 10.38.3.4 defines risk response as approach for dealing with a specific risk is selected. Here, the Organization tries to mitigate risk via organizational checks and balances with proper segregation of front, back and middle office functions. Hence, risk response is correct
No risk categories in BABOK V3. There is only 2 :
- Risk analysis and management
- Risk identification
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