Banking · Risk Management & Reputational Risk
Reputational risk is harder to quantify than credit or market risk, but institutions still take it seriously because it can affect funding, customer behavior, and franchise value. Reputational risk generally refers to:
- 1losses caused by fluctuations in benchmark interest rates
- 2the failure of internal IT systems during business hours
- 3adverse impact arising from negative perception among stakeholders✓
- 4regulatory capital shortfall due to poor provisioning
Correct answer
adverse impact arising from negative perception among stakeholders
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