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      It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout.

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    • Forum Discussion FC

      Backround information:

      In the expert view the three lines of defense model may have weakness in practice. In particular:

      • Misaligned incentives for risk-takers in first line of defense.

      Many experts agree that the most important control is the first line of defence. However, this responsibility conflicts with the objective of most risk-takers in the first line, which is to generate sufficient revenue and profits for the institution.

      • Lack of organisational independence of functions in second line of defense.

      Most risk management functions report formally to the board. However, the de facto day-to-day reporting lines and communication channels are more likely to go to senior management than to the board.


      Forum discussion questions

        1. In what line of defense your depertment/function is operating?
        2. Can you relate above described situation to your organization?
        3. What possible solutions you can recommend in order to overcomeabvoe described weakness?

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