Practice Test Geeks(CBP) Certified Banking Professional Practice Test
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Professional Ethics in Banking Flashcards

7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Professional Ethics in Banking flashcards as text

  1. A bank employee discovers that a colleague is sharing confidential customer account information with a third-party vendor without authorization. What is the employee's primary ethical obligation?

    Answer: Report the breach to compliance or a supervisor immediately

    Unauthorized disclosure of confidential customer information is a serious compliance violation that must be reported immediately to compliance or management.

  2. Under the ethical principle of 'know your customer' (KYC), a banker's primary responsibility is to:

    Answer: Verify customer identity and assess suitability of products

    KYC requires bankers to verify identity, understand customer needs, and ensure products offered are appropriate and suitable.

  3. A loan officer approves a personal loan for a friend despite the friend not meeting the bank's creditworthiness criteria. This behavior is an example of:

    Answer: Preferential treatment and a conflict of interest

    Approving loans for friends who do not meet credit criteria constitutes preferential treatment and a clear conflict of interest.

  4. Which of the following best describes the concept of 'fiduciary duty' as it applies to banking professionals?

    Answer: The legal and ethical obligation to act in the best interest of the client

    Fiduciary duty obligates banking professionals to prioritize the client's best interests over personal gain or institutional profit.

  5. When a bank employee receives an expensive gift from a client seeking favorable loan terms, the ethical course of action is to:

    Answer: Decline the gift and report it per the bank's gift policy

    Accepting gifts from clients seeking favorable treatment creates a conflict of interest; the gift must be declined and reported per policy.

  6. An investment banker possesses material non-public information about an upcoming merger. Trading on this information would violate which ethical and legal principle?

    Answer: Insider trading prohibition

    Trading on material non-public information constitutes insider trading, which is both unethical and illegal under securities laws.

  7. A bank's code of conduct requires employees to report unethical behavior. An employee who fails to report a known violation is said to be engaging in:

    Answer: Complicity through inaction

    Failing to report known violations makes the employee complicit, as silence enables and perpetuates unethical conduct.