Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is a common characteristic of a corporate bank?

1. It must follow regulations of its home country.

2. It can operate in multiple countries simultaneously.

3. It is primarily for personal loans.

4. It needs to only comply with its foreign parent bank's rules.

The correct answer is: It must follow regulations of its home country.

A corporate bank typically must comply with the regulations of its home country as part of its operational framework. This adherence ensures that the bank operates within the legal parameters set by the government and regulatory authorities of its base country. Compliance with local regulations encompasses a broad range of obligations, including anti-money laundering (AML) measures, capital requirements, and reporting standards. While some banking operations might extend beyond national borders, it fundamentally operates under the regulatory regime of its home territory. This allows authorities to monitor and enforce legal standards effectively. The focus of the corporate bank is on business banking services, which typically do not include the provision of personal loans, dispelling that aspect of the options presented. Additionally, relying solely on the rules of a foreign parent bank would likely lead to inconsistencies with national laws, which is not viable for regulatory compliance. Therefore, the operational requirement to adhere to home country regulations is a defining characteristic of corporate banking, ensuring accountability and legal compliance in its strategic activities.