ABC New Hires Presentation
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ABC New Hires Presentation
Regulatory Presentation
JENNIFER FOSCHIA
RASMUSSEN COLLEGE
RISK MANAGEMENT
DELIVERABLE 2
AUGUST 30, 2023
AUTHORS NOTE: THIS PRESENTATION WAS MADE FOR DR. COBB’S
RISK MANAGEMENT CLASS ON 8/30/2023.
Welcome ABC New
Hires!!!
Identify three ways that banks impact the economy.
Identify two regulations and describe their origin and role in
managing risks within banks.
What risk management standards did the banks employ as a
result of the regulations?
What are the consequences of failing to meet the standards
outlined by the regulators?
Would a firm be prudent to properly manage its leverage and
liquidity levels if they are not regulated?
What tools can organizations employ to manage the risks
caused by inadequate levels?
How do Banks Impact the Economy?
Positives:
Promote savings.
Create income and more cash flow for people; supplier of
credit.
They safeguard deposits and loan money.
Providing more job opportunities.
Promotions of Trade, Production and Investment.
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How do Banks Impact the
Economy?
Negatives:
Great recession.
Cause bankruptcies and foreclosures.
Bank Regulations
Securities and Exchange Commission (SEC)
Federal Deposit Insurance Corporation (FDIC)
Dodd-Frank Wall Street Reform & Consumer
Protection Act
Securities and Exchange
Commission
Created in 1934.
Promotes public disclosure.
Protects investors.
Monitors corporate takeover
actions.
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Federal Deposit Insurance
Corporation
Created in 1933.
Also known as the Glass-Steagall Act.
Protect and insure bank depositors.
Regulating banking practices.
Generates income from fees charged to
insured banks and savings associations.
Dodd-Frank Wall Street
Reform & Consumer
Protection Act
Prohibits banks from trading customers deposits for profit.
Protected customers funds from bank misuse.
Promoted consumer and investor protection.
Consumer Financial Protection Bureau.
Volcker Rule.
CONSEQUENCES OF FAILING
TO
MEET REGULATIONS
Reputational Risk.
Regulatory Fines.
Legal Liability Risk.
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Risk Management Standards
For Banks
Evolution of Banking Supervision and Capital
Regulation.
Disclosure Requirements.
Credit Risk.
Bank Capital Requirements.
Elements of Risk Management
and Control
Quality of risk measurement and monitoring.
Acceptability of internal controls to prevent fraud.
Quality of management and board oversight.
Fairness of policies that limits risky activity.
Provide ways for organizations to report on their
compliance with laws and regulations
Consequences of Failing to
Meet the Standards
Fines and Penalties.
Imprisonment.
Loss of reputation.
Difficulty in securing capital or financing.
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Would a firm be prudent to properly manage
its leverage and liquidity levels if they are
not regulated?
Leverage –
This indicator presents the ratio
between selected financial assets of the
banking sector and their total equity.
Liquidity –
This is the risk to a bank's earnings
and capital arising from its inability to timely
meet obligations when they come due without
incurring unacceptable losses.
Appropriate Tools and Their
Benefits
for Managing Each Risk
Loss protection and reduction.
SWOT.
Increasing profitability.
Risk data quality assessment.
Restructure debts by using financial
ratios.
Conclusion
Banks play an important role in the financial system
and the economy.
Banks need regulations to ensure that the financial
system will work properly.
Without regulations in place, the economy can crash.
Banking Regulations help maintain confidence in
consumers that they will be treated fairly and equally
when they deposit money, apply for a loan, or use any
of the many other services that banks offer today.
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References
Chen, J. (2022, April 7).
Securities and Exchange Commission (SEC) defined, how it works
. Investopedia.
https://www.investopedia.com/terms/s/sec.asp
Fintech. (2021, September 10).
The dodd-frank act and its impact on the banking system: The sumsuber
.
Sumsub.
https://sumsub.com/blog/knowledgebase-dodd-frank-wall-street-reform-and-consumer-
protection-act/
Gonzalez, J. (2023, February 17).
Understanding the impact of regulatory non-compliance: Bank Automation
News
. Bank
Automation News | The Definitive Source for Insights and News Surrounding Automation in
Financial Services.
https://bankautomationnews.com/allposts/risk-security/understanding-the-impact-of-
regulatory-non-
compliance/#:~:text=In%20addition%20to%20penalties%20and,punitive%20damages%20and%20significa
nt%20fines.
Hall, M. (2023, June 1).
How the banking sector impacts our economy
. Investopedia.
https://www.investopedia.com/ask/answers/032315/what-banking-sector.asp#toc-how-banks-are-
regulated
Hayes, A. (2023, August 2).
Dodd-Frank Act: What it does, major components, and criticisms
.
Investopedia.https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp
Montevirgen, K. (n.d.).
Federal Deposit Insurance Corporation (FDIC)
. Encyclopædia Money.
https://www.britannica.com/money/Federal-Deposit-Insurance-Corporation