Conduct Risk refers to the risk of inappropriate, unethical, or unlawful behavior by an organization or its employees, which can lead to financial loss, regulatory penalties, or reputational damage. This risk often arises from issues such as conflicts of interest, mis-selling of products, inadequate oversight, or failure to adhere to ethical standards. Effective management of conduct risk involves establishing a strong culture of integrity, implementing clear policies and procedures, providing training and awareness programs, and monitoring behaviors and practices to ensure compliance with legal and ethical standards.

Basel scope:

• Pillar 2

Capital requirements:

Mitigated by Capital

Related Links:

•       Basel Framework