Legal and regulatory risk

Legal risk can be defined through a loss for an institution arising from legally invalid transactions, lawsuits or replies to lawsuits or any other legal action that indicates an obligation to the institution (eg, termination of the contract), loss due to poorly protected assets (eg intellectual property) or loss resulting from changes in legislation. Legal risk results in financial or reputation loss due to regulatory or legal actions, errors in the preparation or execution of contracts, inappropriate management of non-contractual rights or inability to settle non-contractual obligations.