BSTDB has defined Compliance Risk as the risk of legal sanctions, material financial loss, or loss to reputation the Bank may suffer as a result of its failure to comply with laws, its own regulations, code of conduct, and standards of best/good practice. Compliance risk is sometimes also referred to as integrity risk, because a bank’s reputation is closely connected with its adherence to principles of integrity and fair dealing.

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The definition includes legal risk but excludes strategic and reputational risk.

In accordance with the requirements of the Basel Committee on Banking Supervision the Compliance and Operational Risk Management Office (CORMO) has a formal status within the Bank to give it the appropriate standing, authority and independence, set out in its Charter, approved by the Bank’s Board of Directors and communicated to all staff throughout the bank.

• Assist Senior Management in managing effectively the compliance risks faced by the Bank. To this end, it identifies, assesses, advises on, monitors and reports accordingly on the Bank’s compliance risk.
• Assist the Bank in managing the operational risk. The office shall identify, assess, monitor and control/mitigate the operational risk inherent in all material products, activities, processes and systems.