Basel Committee Publishes Guidance on Bank Compliance Function

The Basel Committee on Banking Supervision ("Basel Committee") published guidance on compliance and the compliance function in banks (the "Guidance"). The Guidance describes "compliance risk" as the "risk of legal or regulatory sanctions, material financial loss, or loss to reputation that a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to its banking activities," and then sets forth principles designed to mitigate that risk. Notably, the Guidance includes within its definition of compliance risk activities by which a bank knowingly assists a customer to avoid regulatory or financial responsibilities.