12.1 There shall be a person appointed the Chief Risk Officer ('CRO') with distinct responsibility for the risk management function and for maintaining and monitoring the effectiveness of the credit institution's risk management system. Where a credit institution is not designated as a High Impact credit institution and where the nature, scale and complexity of the operations of the credit institution do not justify a dedicated exclusive CRO function, another pre-approval control function [Pre-approval control function means those functions set out in schedule 2 of the 'Regulations'. The 'Regulations' means the Central Bank Reform Act 2010 (Sections 20 and 22) Regulations, 2011 (S.I. No. 615 of 2011).] may fulfil that role. The prior approval of the Central Bank shall be obtained prior to making any such arrangement.

12.2 The CRO shall have relevant expertise, qualifications and background or be required to undertake relevant and timely training. The CRO shall have sufficient seniority and independence to influence proposals or challenge decisions which affect a credit institution's exposure to risk.

12.3 The CRO shall be responsible for ensuring that the credit institution has effective processes in place to identify and manage the risks to which the credit institution is or might be exposed.