CBP Compliance, Risk and Regulations 2

Question 1

Under the Bank Secrecy Act (BSA), what is the threshold above which a Currency Transaction Report (CTR) must be filed?

Accepted Answer

$10,000

Answer

The BSA requires banks to file a CTR for any cash transaction exceeding $10,000 in a single business day.

Question 2

Which regulatory framework establishes the three pillars of minimum capital requirements, supervisory review, and market discipline for banks?

Accepted Answer

Basel II Accord

Answer

Basel II introduced three pillars: Pillar 1 (minimum capital), Pillar 2 (supervisory review), and Pillar 3 (market discipline).

Question 3

A bank's compliance officer discovers that a branch has been filing SARs but not retaining copies. Which BSA requirement has been violated?

Accepted Answer

Recordkeeping requirement

Answer

BSA regulations require banks to retain SAR filings and related documentation for a minimum of five years.

Question 4

What does the term 'regulatory capital' primarily refer to in banking?

Accepted Answer

Capital required by regulators to absorb losses

Answer

Regulatory capital is the minimum amount of capital that regulators require banks to hold as a buffer against potential losses.

Question 5

Which of the following best describes 'model risk' in banking?

Accepted Answer

Risk that a financial model produces inaccurate outputs used in decision-making

Answer

Model risk is the risk of adverse consequences from decisions based on incorrect or misused mathematical models.

(CBP) Certified Banking Professional Practice Test