Third-Party Outsourcing Risk and Model Risk Management
Free GARP FRM Part II lesson in Operational Risk and Resilience. 21 min read, ~3,219 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. Five-stage third-party lifecycle: risk assessment, due diligence, contract negotiation, ongoing monitoring, and exit planning. Each phase carries documented expectations. Concentration risk...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
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