Assembly of a conduct risk regulatory model for developing market banks

South African Journal of Economic and Management Sciences

BACKGROUND: The substantial penalties imposed on banks in the recent past for various conduct irregularities have given rise to a new type of risk called conduct risk. Conduct risk comes about when financial services companies conduct themselves in an inappropriate way towards their customers, resulting in a negative (economic) outcome for the customer. What makes the management and mitigation of conduct risk by banks so different is that it cannot be easily integrated into a bank's standard risk management framework. So far, the concept of conduct risk has not been formally covered by the Basel Accords.

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Antje Hargarter, Gary van Vuuren
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ResourceID: 177821

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