Third-Party Outsourcing Risk and Model Risk Management
Free GARP FRM Part II lesson in Operational Risk and Resilience. 21 min read, ~3,172 words.
Outsourcing transfers the activity, not the risk. The Federal Reserve December 2013 guidance and FDIC SR 11-7 both place ultimate responsibility on the regulated firm's board and senior management. Third-party risk lifecycle: risk assessment, due diligence, contract negotiation, ongoing monitoring, and exit planning. Each phase has documented expectations. Concentration risk...
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