Reputational risk is the risk of losses of the credit organization due to decrease in the number of customers (counterparties) as a result of negative public image about financial stability of the credit organization, quality of provided services or the nature of business in general.
The bank manages reputation risk with the aim to bring potential losses down, preserve and maintain the bank’s reputation among customers, counteragents, shareholders, participants of the financial market, state governmental authorities, local self-government, the bank unions (association), self-governed organizations, in which the bank participates.
The bank manages reputation risks by means of:
- the system of marginal values (limits);
- the system of authorities and decision-making;
- information system;
- the system of reputation risk monitoring;
- the system of minimization and control