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Question

Name the risk which arises when bank’s image is not good and that leads to public’s loss of confidence in the bank.

A operational risk Correct Answer Incorrect Answer
B reputational risk Correct Answer Incorrect Answer
C market risk Correct Answer Incorrect Answer
D confidence risk Correct Answer Incorrect Answer
E Market risk Correct Answer Incorrect Answer

Solution

Any event which affects the name or brand image of the entity is Reputational Risk. Adverse publicity regarding an entity’s practices will lead to a loss of revenue or litigation. Any adverse publicity, news coverage, comments etc. has the ability to dent the trust created by the entity and becomes detrimental to the business of the entity.

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