Why is the choice of a risk measure for internal and external risk of great practical importance?

It determines the minimum reserve requirements in financial trading.

B It determines the minimum reserve requirements in financial trading. Different measures can result in a lower or higher minimum reserve requirement which results in a lower or higher profit for the financial institution. Although it does not designate the audience that will receive the resulting financial reports, some financial measures should be used for internal purposes while other measures are more appropriate for external audiences. The number of clients to serve and the types of risks to be encountered are not aspects of selecting a risk measure.