MANAGEMENT

Detailed explanation-1: -(d)When bank’s image and public standing is in doubt and leads to public’s loss of confidence in a bank.

Detailed explanation-2: -What is reputational risk? Reputational risk is the risk of failure to meet stakeholder expectations as a result of any event, behaviour, action or inaction, either by HSBC itself, our employees or those with whom we are associated, that may cause stakeholders to form a negative view of the Group.

Detailed explanation-3: -The three largest risks banks take are credit risk, market risk and operational risk.

Detailed explanation-4: -These risks are: Credit, Interest Rate, Liquidity, Price, Foreign Exchange, Transaction, Compliance, Strategic and Reputation. These categories are not mutually exclusive; any product or service may expose the bank to multiple risks.

Detailed explanation-5: -Definition: Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost. It arises when both the parties have incomplete information about each other.