Reputational Risk in Banks – Polish Normative (Legal) Aspects

Abstract

A generally accepted standard, both in regulatory and market terms, is risk management, in particular with regard to material risks, in the operation of a bank. The Polish legislation on banking activities also includes norms on the system of managing risk, including reputational risk. The purpose of this article is to establish the legal relevance of reputational risk for banks, including to specify its place within the risk management system, as well as an attempt to identify particular stages in the process of managing reputational risk. The direct purpose of this article is to verify the following theses: 1) reputational risk is a material risk involved in banking activities and, for the above reason, it should be taken into account in the risk management system so that its management is the bank’s legal obligation; 2) the currently applicable Polish legislative framework offers sufficient solutions with regard to reputational risk. As a result of the analyses carried out, the former thesis has been verified positively and the latter negatively. Considering the normative approach to the discussed problems, primarily, the dogmatic legal method will be used in the article, and the analysis will cover provisions of generally applicable law. The main conclusion from the analysis carried out is that reputational risk management is a legal requirement imposed on a bank that has not been made specific.