Economics · Three Lines of Defense Model in Banking
In the 'Three Lines of Defense' framework for risk management and internal control in a bank, the compliance function is categorized as:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1the fourth line of defense, consisting of external regulatory bodies and statutory auditors
- 2the third line of defense, as it provides independent assurance to the board on the effectiveness of internal controls
- 3the second line of defense, as it provides oversight and monitors the implementation of effective risk management practices✓
- 4the first line of defense, as it manages risks directly through customer-facing activities
Correct answer
the second line of defense, as it provides oversight and monitors the implementation of effective risk management practices
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