Financial Risk Manager Part 1
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In the recent past, a certain bank has had a poor relationship with its regulator. The CEO asks the CRO to suggest some of the actions the company could take in a bid to improve this relationship in the future. Which of the following presents a possible recommendation?
Other
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TTanishq
A
Allocating additional funding to the compliance department to enhance monitoring capabilities.
B
Developing a robust internal supervisory policy.
C
Implementing an internal public relations campaign to highlight the bank's commitment to regulatory compliance.
D
Scheduling frequent meetings with the regulator to discuss the bank's progress and
Explanation:
Explanation
Option D is the most appropriate recommendation for improving the relationship with regulators. Here's why:
- Direct engagement: Scheduling frequent meetings with the regulator demonstrates proactive engagement and transparency, which is crucial for rebuilding trust.
- Progress reporting: Regular discussions about the bank's progress show commitment to addressing regulatory concerns and implementing improvements.
- Relationship building: Face-to-face interactions help build personal relationships and mutual understanding.
While the other options have merit:
- Option A: Additional funding for compliance is good but doesn't directly address relationship building
- Option B: Developing internal policies is important but is an internal action that doesn't directly engage the regulator
- Option C: Internal PR campaigns don't directly impact the regulator's perception
In regulatory relationships, direct communication and transparency are key to rebuilding trust and improving relationships.
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