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FRM Part I · FRM Exam Part I · GARP Code of Conduct

A GARP member is a risk consultant for two competing banks. While working for Bank A, she designs a stress-testing approach. Bank B then asks her to deliver the same approach, using Bank A's proprietary scenario parameters that she holds under a confidentiality agreement. Which course of action best satisfies the Code of Conduct?

She should offer Bank B only generic methods drawn from general expertise and public information, withholding Bank A's confidential parameters, and handle the conflict through appropriate disclosure. The Code demands confidentiality and conflict management. Removing Bank A's name still reveals proprietary data, and total refusal is not required.

  1. ADeliver the approach to Bank B but remove Bank A's name from the documents
  2. BDeliver the approach including Bank A's parameters, since the methodology is her own intellectual work
  3. CDeliver to Bank B only generic methods based on her general expertise and public information, without Bank A's confidential parameters, and manage any conflict of interest by disclosure as appropriateCorrect
  4. DRefuse all further work for either bank, since any overlap breaches the Code

Explanation

The Code requires protecting confidential information and managing conflicts of interest, including disclosure. General expertise can be used, but Bank A's proprietary parameters cannot. Removing a name still discloses confidential content, and refusing all work is not required where conflicts can be managed.

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