Which of the following statements about requirements for dealing with limit violations is correct?
A) Financial institutions have to establish procedures for handling limit breaches that are in accordance with their decision-making hierarchy.
B) If a partial limit violation does not exceed the overall limit, no reaction is required.
C) The definition of escalation levels is not required in order to react appropriately to different sorts and intensities of limit breaches.
D) It is adequate and proper to define reactions only to standard cases of limit violations.

Question

Quizplus · Accepted Answer

Financial institutions must establish procedures for dealing with limit breaches that follow their decision-making hierarchy, ensuring that the appropriate personnel are informed and that proper measures are taken. B is incorrect because any limit breach must be addressed, even those that do not exceed the overall limit. C is incorrect because defining escalation levels is critical in addressing limit breaches effectively. D is incorrect because it is necessary to account for various forms and severities of limit breaches in defining responses.

Which of the Following Statements About Requirements for Dealing with Limit