Which line of defense is described as setting standards, conducting independent validations, and maintaining the model inventory?

• A. First Line of Defense
• B. Second Line of Defense
• C. Third Line of Defense
• D. Executive Committee

Answer: (A)

The line described is the one that runs the business day to day and owns risk in its operations. Setting standards, conducting validations, and maintaining the model inventory are all part of how the line ensures its processes and models are fit for purpose in practice. This line is responsible for implementing controls, ensuring models are used correctly, and keeping an up-to-date catalog of which models exist, their versions, and their usage. In other words, they are the ones who embed risk management into daily activities, making them the First Line of Defense.

Remember how the rest of the model governance is usually split: the Second Line provides risk oversight, policy, and independent challenge; the Third Line (internal audit) provides independent assurance of the entire framework. The described responsibilities—standards, validation, and inventory management—are framed here as part of the operational ownership of risk, aligning with the First Line.