# Legal risks

- Canonical URL: https://www.gerhardmerk.de/legal-risks
- Post ID: 594124
- Modified: 2023-07-25T21:01:01+00:00
- Language: en

## Definition

Risk of loss from hidden legal errors and from out-of-court and court disputes; they are considered part of operational risk. - Hidden legal errors include, for example, the unintentional overlooking of a law or regulation, and in the case of contracts, in particular defects arising from wrong assumptions, badly chosen wording, or incorrect translation from or into a foreign language. Legal risks can cause or exacerbate credit risks or liquidity risks. - The legal risks of banks have increased considerably over the last ten years. The main reasons for this are - the internationalization of business and thus the question of applicable law, - the increasing complexity of new financial products, - a flood of new laws and regulations, especially in the course of strengthening investor protection, - increasing intervention in the financial sector by the supervisory authorities, and - rapid growth in electronic banking, which harbors many different and in some cases considerable individual risks for the bank, especially losses from hacker attacks of various kinds. - See supervision, supervision, full, electronic banking, financial agent, legal opinion, market abuse directive, pharming, phishing, alignment of law, choice of law, conflict of law, risk, banking, straightjacking, sign signature. - Cf. Deutsche Bundesbank Monthly Report, January 2004, p. 30 et seq. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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