CRO Regulatory Compliance & Corporate Policies 2

Question 1

Under the Dodd-Frank Act, which entity is responsible for overseeing systemic risk in the U.S. financial system?

Accepted Answer

Financial Stability Oversight Council (FSOC)

Answer

FSOC was created by Dodd-Frank to identify and respond to systemic risks threatening U.S. financial stability.

Question 2

A company's compliance policy requires annual AML training. An employee misses the deadline by one week due to a medical leave. What is the most appropriate CRO response?

Accepted Answer

Apply a policy exception with documented justification and a remediation deadline

Answer

Policy exceptions with documentation and remediation timelines are standard practice for isolated, justified compliance gaps.

Question 3

Which Basel III pillar specifically addresses market discipline through public disclosure requirements?

Accepted Answer

Pillar 3

Answer

Pillar 3 of Basel III requires banks to publicly disclose risk exposure and capital adequacy information to enable market discipline.

Question 4

When a CRO discovers that a business unit has been circumventing a key internal control, what should be the FIRST action?

Accepted Answer

Escalate to senior management and the audit committee

Answer

Circumvention of key controls is a governance failure requiring immediate escalation to senior management and the audit committee before other actions.

Question 5

The Volcker Rule under Dodd-Frank primarily restricts which activity for banking entities?

Accepted Answer

Proprietary trading and certain hedge fund/PE fund sponsorship

Answer

The Volcker Rule prohibits banking entities from engaging in proprietary trading and limits their relationships with hedge funds and private equity funds.

(CRO) Chief Risk Officer Certification Practice Test

(CRO) Chief Risk Officer Certification Practice Test

CRO Regulatory Compliance & Corporate Policies 2