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FRM Part II · FRM Exam Part II · Digital Resilience and Financial Stability: The Quest for Policy Tools in the Financial Sector

A risk manager at a payments firm must set an impact tolerance for an important business service. Which statement best describes the purpose of an impact tolerance within a digital resilience framework?

An impact tolerance is the maximum level of disruption to an important service that can be accepted before intolerable harm results, assuming disruption occurs. It focuses on recovery and continuity rather than prevention, and is not a probability, expected loss or capital measure.

  1. AThe expected annual loss from the service, used to price insurance
  2. BThe maximum disruption to the service that can be accepted before intolerable harm occurs, assuming a disruption happensCorrect
  3. CThe probability that a cyber attack will succeed against the service
  4. DThe capital buffer required against credit losses in the service

Explanation

Impact tolerance assumes disruption occurs and sets the limit of acceptable harm, typically in time or scale, shifting focus from prevention to continuity and recovery. It is not a probability, expected loss or credit buffer.

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