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Tag Archives: taxes

Regulatory risk

Friday, December 4, 2009

Banks are highly regulated organizations. They are at risk from regulatory and legislative changes that increase the costs of doing their business and may even prohibit them from undertaking it at all. They may breach regulatory requirements and be fined, face losing their license or suffer loss of reputation.

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Settlement risk

Thursday, November 26, 2009

This is the risk that the settlement of a transaction with a counterparty fails. A bank that exchanges US$ with another bank for yen has a potential settlement risk due to the time difference between the USA and Japan; it will deliver the US$ before it receives the equivalent in yen.

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