Banking · Legal & Operational Risk
A bank may face legal and compliance risk even when its assets perform well, if it violates laws, regulations, or contractual requirements. This type of risk is important because it can result in:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1penalties, litigation, operational restrictions, and reputational damage✓
- 2exemption from supervisory review
- 3guaranteed expansion of market share
- 4automatic increase in net interest margin
Correct answer
penalties, litigation, operational restrictions, and reputational damage
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