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

Which statement best distinguishes operational resilience from traditional operational risk management?

Operational resilience assumes disruptions will happen and aims to keep critical operations running within tolerance, whereas traditional operational risk management stresses preventing and measuring loss events. The two complement each other, and resilience is neither limited to technology nor a capital measure.

  1. AOperational resilience assumes some disruptions will occur and focuses on continuing to deliver critical operations within tolerance, while traditional approaches emphasise preventing and measuring loss eventsCorrect
  2. BOperational resilience concerns only technology failures, while operational risk management concerns only fraud
  3. COperational resilience replaces the need for risk identification and controls
  4. DOperational resilience is concerned solely with regulatory capital for operational risk

Explanation

Resilience takes an outcome-based view: disruption is assumed to be inevitable, so the aim is to keep critical services within impact tolerances. Traditional operational risk management concentrates more on identifying, controlling and quantifying risk and losses. The two are complementary, not substitutes, and neither is limited to a single risk type or to capital.

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