CRISC Manual 2015: Risk Indicators are used to measure levels in comparison to Defined RISK THRESHOLDS and alert the organization when a risk level approaches.
Not all KRIs will be related to regulator requirements, but all of it should have thresholds. So correct answer is C.
When developing key risk indicators (KRIs), it is most important to have properly set thresholds. KRIs are metrics used to identify and signal potential risk events before they escalate into significant issues. Setting appropriate thresholds ensures that organizations can distinguish between normal variations and potential risk events. If thresholds are set too high or too low, it can lead to ineffective risk management and missed opportunities to address emerging risks. While the availability of qualitative data (Option A), alignment with regulatory requirements (Option B), and alignment with industry benchmarks (Option D) are important considerations, they are secondary to the critical task of establishing well-defined and properly set thresholds for the KRIs.
C is the correct answer. (Pg 72 CRM 5) Risk indicators are used to measure risk levels in comparison to defined risk thresholds, so that the organization receives an alert when a risk level approaches an unacceptable level. So obviously, one has to have thresholds when developing KRIs. Manual Pg 73 says Regulatory compliance, by providing data that can be used as an input for operation risk capital calculations. That is not the MOST important, in any case.
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