CAMS · Question #655
A high-profile, successful entrepreneur has been a client of a Swiss private bank for more than a decade. Recently, the entrepreneur launched a political career, with rather extremist political…
The correct answer is A. The client is not able (or willing) to provide documentary evidence of tax compliance. E. Continuing the client relationship poses an increasing reputational risk, which could negatively. Tax Compliance: Banks have a responsibility to ensure that their clients comply with tax regulations. If a client fails to provide evidence of tax compliance or is unwilling to do so, the bank may terminate the relationship to avoid legal and regulatory risks. Reputational…
Question
A high-profile, successful entrepreneur has been a client of a Swiss private bank for more than a decade. Recently, the entrepreneur launched a political career, with rather extremist political views. On which grounds can the bank terminate the client's bank relationship? (Select Two.)
Options
- AThe client is not able (or willing) to provide documentary evidence of tax compliance.
- BThe client's account has an increase in unusual and significant monthly inflows.
- CA business partner of the account holder requests an asset freeze, stating a business dispute and
- DThe client has made his/her fortune in the mining and excavation industry, which the bank has
- EContinuing the client relationship poses an increasing reputational risk, which could negatively
How the community answered
(50 responses)- A76% (38)
- B14% (7)
- C6% (3)
- D4% (2)
Explanation
Tax Compliance: Banks have a responsibility to ensure that their clients comply with tax regulations. If a client fails to provide evidence of tax compliance or is unwilling to do so, the bank may terminate the relationship to avoid legal and regulatory risks. Reputational Risk: High-profile clients with extremist political views can create reputational risks for the bank. If the client's political activities or views could harm the bank's reputation, the bank may choose to terminate the relationship.
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