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FRM Part II · FRM Exam Part II · Introduction to Operational Risk and Resilience

A bank's board wants an operational resilience framing in addition to traditional operational risk management. Which description best reflects the added scope that resilience brings?

Operational resilience adds the ability to keep delivering critical operations through disruption, accepting that some incidents will occur and focusing on responding and recovering within defined tolerances. It goes beyond prevention, insurance or IT alone.

  1. AFocusing only on reducing the frequency of loss events through preventive controls
  2. BEnsuring critical operations can continue to be delivered through disruption, accepting that some disruptions will occur and focusing on recovery within tolerancesCorrect
  3. CTransferring all operational risk to insurers so that disruptions do not affect capital
  4. DLimiting the scope to information technology failures

Explanation

Resilience assumes disruptions will happen and focuses on the ability to prevent, adapt, respond, recover and learn so critical services stay within impact tolerances. It is wider than frequency reduction, insurance or IT alone.

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