“The risk responsibilities of front-line units at financial institutions have increased significantly. The front line must now cover the risks associated with their activities, and should therefore be held accountable by the CEO and the board for effectively assessing and mitigating those risks, according to the Office of the Comptroller of the Currency (OCC).
Until recently, it was largely the second line of defense (the independent risk management team) that led the risk management exercise, while the front line focused more on sales and revenue targets. The latter’s risk responsibilities were largely limited to not breaching risk thresholds.”
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