The Basel II Accord’s operational risk definition excludes all of the following items EXCEPT:

The Basel II Accord’s operational risk definition excludes all of the following items EXCEPT:
A . Legal risk
B . Strategic risk
C . Reputational risk
D . Geopolitical risk

View Answer

Answer: A

Explanation:

The Basel II Accord’s operational risk definition specifically includes legal risk. Operational risk under Basel II is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. This definition explicitly includes legal risk but excludes strategic and reputational risks.