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9 May, 10:22

Carson County State Bank has a ratio of equity capital to total assets of 2.5%. The FDIC which regulates this bank has determined that this is not enough equity capital and is making the bank issue new stock in the market. In addition, they are not allowing the bank to issue a dividend to their current stockholders. Which type of risk would this be an example of?

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  1. 9 May, 10:40
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    compliance risk

    Explanation:

    Compliance risk -

    It refers to the risky situation, which can be due to some financial forfeiture, legal penalties, loss of material, when the company fails to follow the rules and regulations, is referred to as compliance risk.

    Hence, from the given scenario of the question,

    The correct type of risk involved is compliance risk.
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Home » Business » Carson County State Bank has a ratio of equity capital to total assets of 2.5%. The FDIC which regulates this bank has determined that this is not enough equity capital and is making the bank issue new stock in the market.
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