16-40 Regulation F requires financial institutions to develop internal procedures to limit settlement exposures to correspondent banks.

Question

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Regulation F, also known as the "Limitations on Interbank Liabilities" regulation, requires financial institutions to establish internal procedures to limit settlement exposures to correspondent banks. This is to ensure that the institution does not become overly reliant on a single correspondent bank and to mitigate the risks associated with interbank transactions.

16-40 Regulation F Requires Financial Institutions to Develop Internal Procedures