FRM Part I · FRM Exam Part I · The Governance of Risk Management
Which of the following is generally regarded as a core responsibility of the CRO in a financial institution?
A core CRO responsibility is developing and overseeing the enterprise-wide risk management framework and reporting aggregate risk exposures to senior management and the board. Revenue generation belongs to the business lines, and auditing the risk function belongs to internal audit.
- AOriginating loans to meet revenue targets
- BDeveloping and overseeing the enterprise-wide risk framework and reporting aggregate risk exposures to senior management and the boardCorrect
- CPerforming the internal audit of the risk function
- DSetting trading desk profit targets
Explanation
The CRO is responsible for the enterprise-wide risk management framework and for reporting aggregate risk to senior management and the board. Origination and profit targets are first-line or business roles, and internal audit is a separate third-line function.
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