Given that banks are operating within a highly disruptive economy it is imperative that a robust Technology Risk Management Framework (TRMF) is in place. i. Name two risk factors that need to be taken into account in the TRMF? ii. Describe two scenarios that could constitute a risk to the bank if
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Given that banks are operating within a highly disruptive economy it is imperative that a robust Technology Risk Management Framework (TRMF) is in place.
i. Name two risk factors that need to be taken into account in the TRMF?
ii. Describe two scenarios that could constitute a risk to the bank if the factors mentioned in Question i. were not taken into consideration.
iii. What is the possibility of these risks occurring and what would the impact to the bank be?
iv. Describe how you would prioritise the risks to ensure the least impact?
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- QUESTION THREE (3)Explain in detail each of the following primary risks faced by banks and explain how theyare managed.A. Credit risk,B. Liquidity risk,C. Interest rate risk, andD. Foreign exchange riskABC Bank acquires XYZ Bank through a merger but subsequently fails due to some unforeseen incompatibilities resulting from their widely different cultures. This is an example of __________ risk. a. country b. liquidity c. operational d. marketCritically analyse Green Banking by covering following points: - Define Green Banking and explain its importance as bank risk management. - Critically analyse the role of banks in mitigating environmental risks, providing examples. - Discuss how different risks affect banking activities due to environmental issues. - What are the challenges in green banking adoption and how to overcome these challenges?
- this question is about the module: Introduction of Financial Econometrics please show your workingsDiscuss how the above risk can be managed by commercial bank.Financial intermediaries a.reduce the cost of financial transactions. b.provide safety of resources only for the large borrowing customers who can afford it. c.increase the cost of financial transactions but offset these higher costs by providing safekeeping of customer funds. d.provide handling of payments but usually less efficiently than other firms.
- 31) The FDIC must take steps to close down banks whose equity capital is less than ________ of assets. A) 4% B) 3% C) 2% D) 1% 32) Off-balance-sheet activities A) generate fee income with no increase in risk. B) increase bank risk but do not increase income. C) generate fee income but increase a bank's risk. D) generate fee income and reduce risk. 33) The Basel Accord, an international agreement, requires banks to hold capital based on A) risk-weighted assets. B) the total value of assets. C) liabilities. D) deposits. 34) The Basel Accord requires banks to hold as capital an amount that is at least ________ of their risk-weighted assets. A) 10% B) 8% C) 5% D) 3% 35) Under the Basel Accord, assets and off-balance sheet activities were sorted according to ________ categories with each category assigned a different weight to reflect the amount of ________. A) 2; adverse selection B) 2; credit risk C) 4; adverse selection D)…Match the situation with its corresponding risk category v The Federal Reserve increases capital requirements A. Credit risk - v A rogue trader circumvents trading rules B. Settlement risk v A homeowner defaults on a mortgage loan C. Legal risk v On the date of settlement, the seller can't deliver the promised securities D. Liquidity risk v Interest rates rise causing the value of the bank's bond portfolio to decline E. Market risk v A bank is unable to obtain short-term funding to meet deposit outflows F. Operational riskDMacroeco X + A learn.vccs.edu/courses/362470/quizzes/2905964/take E Apps M Gmail YouTube Maps Get My Payment | . Question 13 Which of the following will yield to a bank the lowest return? O Short term loans with little risk. Long term loans with a lot of risk. There is no distinction in the types of loans and risk or potential return. Loans made where the liquidity rate is the highest. Question 14 2 pts The Federal Reserve has the duty of regulating the nation's money supply. True False Question 15 2 pts P Type here to search
- Which of the following factors pose a limit on the ability of commercial banks to increase the quantity of money in circulation by extending new loans? Select one or more: a. the quantity of Central Bank reserves that they own b. the quantity of money that savers lent to them by opening deposits c. the behavior of households and firms, which reduce the quantity of money in circulation by repaying previous loans. d. the availability of profitable lending opportunities in the economy e. the willingness of household and firms to take up new debts at the given interest rateAdvance reasons why commercial banks place emphasis on the management of risk.There are various theoretical reasons why economies of scale should occur in the banking industry: 1 Specialization of labour. There is considerable scope for this as cashiers, loan officers, account managers, foreign exchange managers, investment analysts and programmers can all increase their productivity with increased volume of output. 2 Indivisibilities. Banks make use of much computer and telecommunications technology. Larger institutions are able to use better equipment and spread fixed costs more easily. 3 Marketing. Much of this involves fixed costs, in terms of reaching a given size of market; large institutions can again spread these costs more easily. 4 Financial. Banks have to raise finance, mainly from depositors. Larger banks can do this more easily and at lower cost, meaning that they can afford to offer their depositors lower interest rates. There are also reasons why banks should gain from economies of scope; many of their products are related and banks have…