The risk that a change in laws and regulation will significantly impact
an institution. A change in laws or regulations enacted by a governmental
or regulatory body can dramatically increase the costs of conducting a
business, decrease the attractiveness of an investment, or change the
competitive landscape. For example, regulatory risks arising from climate
change concerns include (1) more vigorous disclosure requirements regarding
a manufacturer's emissions and (2) the emergence of minimum performance
standards tied into energy consumption and greenhouse gas emission controls.