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What is the primary risk management objective of implementing a Large Exposure Framework (LE

Q: Answer-What is the primary risk management objective of implementing a Large Exposure Framework (LEF)?

The primary goal of a Large Exposure Framework is to limit a financial institutions maximum exposure to a single counterparty or a group of connected counterparties. This safeguards the institution against catastrophic losses and systemic vulnerabilities resulting from credit concentration risk.

A To completely eliminate market and liquidity fluctuations for standard retail banking units

B To reduce credit concentration risk and prevent systemic shocks by limiting high-value exposures to a single counterparty or connected group

C To mandate uniform annual processing fees for cross-border commercial lending operations

D To regulate the physical expansion and licensing of suburban financial branches

E To oversee the independent tax registration of foreign portfolio sub-funds

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