Identify two regulations and describe their origin and role in managing risks within banks. What risk management standards did the banks employ as a result of the regulations?

Two regulations which have had a significant impact on risk management within banks are The Basel Accords and The Sarbanes-Oxley Act. The first is an international set of standards issued by the Bank for International Settlements (BIS) in 1988 designed to promote sound banking practices by requiring financial institutions to hold adequate capital reserves against potential losses from unexpected events such as economic downturns or natural disasters. As a result, banks began introducing more stringent risk management protocols – such as establishing stress tests to measure their ability to withstand market shocks –in order to ensure they remain compliant with these standards.

The Sarbanes-Oxley Act was passed in 2002 following the collapse of Enron and other corporate scandals; it imposes stricter transparency requirements on publicly traded companies in the US, including those operating in the banking sector. This statute requires firms to maintain accurate records of their financial transactions and disclose any potential conflicts of interest between executives and shareholders; failure to comply could result in hefty fines or other penalties. In response, many banks have implemented new internal controls aimed at preventing fraud or misappropriation of funds while ensuring that all information provided is accurate and up-to-date.

Overall then, both these regulations have played a key role in improving risk management within banks by promoting greater accountability across the industry and encouraging organizations to adopt appropriate measures for avoiding future losses arising out of unforeseen circumstances.