General Studies · Risk Management
In a robust risk management framework, the 'Three Lines of Defense' model is essential for maintaining a healthy risk culture. Which of the following best describes the primary responsibility of the Second Line of Defense?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The External Auditors who provide an opinion on the accuracy of the bank's financial statements and regulatory filings.
- 2The risk management and compliance functions that provide oversight, set policies, and challenge the risk-taking activities of the business units.✓
- 3The Internal Audit function that provides independent assurance to the Board of Directors regarding the effectiveness of internal controls.
- 4The business units and frontline staff who are responsible for identifying and managing risks in their daily operational activities.
Correct answer
The risk management and compliance functions that provide oversight, set policies, and challenge the risk-taking activities of the business units.
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