Question

carson county state bank has a ratio of equity capital to total assets of 2.5%. the regulators have asked all banks of similar size to maintain a capital adequacy ratio of 8%. they are making the bank issue new stock in the market. in addition, they are not allowing the bank to issue dividends to their current stockholders. which type of risk would this be an example of? (2 points) operational risk legal risk compliance risk strategic risk reputation risk

Answer 1

Additionally, they are restricting the bank's ability to distribute dividends to their current shareholders. As an illustration of compliance risk.

What effect does compliance risk have?

Risks related to compliance can potentially put your company at risk for the following outcomes: legitimate punishments. cancelled contracts forfeiture of money.

Why is risk of compliance important?

The negative consequences an organization may face if it does not fully adhere to required standards are referred to as compliance risk. In other words, if a company breaks internal or external standards, regulations, or laws, it may face financial or legal consequences.

What kinds of dangers arise from compliance?

Normal consistence chances include unlawful practices and incorporate extortion, burglary, pay off, illegal tax avoidance and theft. Breach of privacy. The violation of privacy laws is a common compliance risk. Organizations are impacted by cyber risks such as malware, viruses, and hacking.

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