ARisk Appetite Statement (RAS)defines an institution’sacceptable level of risk-takingand alignsAML and financial crime controlswithorganizational strategy.
Option C (Correct):AnRAS sets clear limits for acceptable risk-taking, balancingrisk and business opportunities.
Option D (Correct):The RASis a management-approved documentthat integratesrisk tolerance, compliance strategy, and business goals.
Why Other Options Are Incorrect:
Option A (Incorrect):An RASis not just a reporting document; it actively shapesrisk management decisions.
Option B (Incorrect):An RAS includesboth qualitative and quantitative factors, butnot just qualitative elements.
Option E (Incorrect):An RAS does notonly define residual risk—itguides overall risk limitsand policies.
How an RAS Strengthens AML Compliance:
Defines acceptable AML risk levels across business units.
Guides compliance teams on risk tolerance for high-risk customers.
Ensures alignment with FATF, regulatory expectations, and internal controls.
[Reference:, Basel Committee’s Principles for Risk Management, FATF Recommendation 1 (Risk-Based Approach to AML), Wolfsberg Group Guidance on Risk Appetite and Compliance Frameworks, , , , ]
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