Politically motivated limitations on payments of foreign currency may expose an FI to

Question

Quizplus · Accepted Answer

Politically motivated limitations on payments of foreign currency are a form of sovereign country risk, which is the risk that a foreign government may take actions that adversely affect an FI's operations or profitability. This risk can be caused by political instability, changes in government policies, or international conflicts. Other risks listed (interest rate risk, credit risk, foreign exchange risk, and off-balance-sheet risk) can also affect FIs, but they are not directly related to politically motivated limitations on payments of foreign currency.

Politically Motivated Limitations on Payments of Foreign Currency May Expose