Securitization changes the systemic (system-wide) risksin the regulated and unregulated “shadow” banking system. What is securitization? Does it pose a problem foreffective banking systems?

Q: The following is true of deposit insurance, except     Depositor no longer has incentives to…

A: Deposit insurance is used to refer to the guarantee provided to protect the savings of the…

Q: Explain the Shadow-banking system elaborately in your own words.

A: In plain and simple words shadow banking refers to those activities that are very similar to bank…

Q: Role of Central Banks and Moral Hazards The job of central banks in making moral hazard. How do…

A: Introduction:The job of central banks in making moral hazard-Central banks have injected moral…

Q: 3. To what extent is central bank independence under threat? Are central banks themselves doing…

A: We have to discuss the following points : The extent of Central Bank independence  Efforts of…

Q: What caused the banking crisis? Explain b. Why was the Insurance Guarantee Agency established…

A: A banking crisis is a situation when the banks are at the point of solvency and liquidation. It may…

Q: What are the possible arguments for setting up a firewall between investment banks and commercial…

A: At the time, improper banking activity–the overzealous commercial bank involvement in stock market…

Q: balance-sheet mismatch that financial intermediaries

A: Financial intermediaries as the name suggest are the middlemen between two parties engaged in a…

Q: Which is NOT a source of fraud risk (from the Fraud Triangle)?  a) Fraud Tip Hotline b) Perceived…

A: According to the Fraud Triangle, all three elements - opportunity, motivation or pressure, and…

Q: Which of the following is not a reason for banks to be regulated? a.To protect depositors. b.To…

A: A bank is a type of financial institution that handles all procedures linked to depositing and…

Q: What is written in background of study for research on risk management mechanism in the banking…

A: The banking sector plays a crucial role in facilitating economic activities and providing financial…

Q: Explain Poor supervision by Central Banks with examples

A: Central banks play major role in the country’s economy. Some of the main function of these banks are…

Q: Select one: Regulation encourages fair competition in the industry Regulation ensure that banks…

A: Regulations ensure transparency in processes and reduce risk. They also ensure that each indiviual…

Q: How can bankers be spotting potential fraud among the loan granted

A: Bank loan means the loan given by the bank to the borrower. This loan can be provided for short term…

Q: How are the characteristics of an organized security exchange differ from an over the counter…

A: Financial markets contain any marketplace where securities such as the stock market, bond market,…

Q: Which of the following is not a purpose of internal controls?     Guarantee profits     Protect…

A: Internal control can be defined as a system to follow the rules and mechanism in the organisation so…

Q: Moral hazard caused by Deposit Insurance Schemes refers to: Question 2Answer a. The placing of…

A: The objective of the question is to understand the concept of 'Moral Hazard' in the context of…

Q: 13. Explain the primary risks that commercial banks manage?

A: Since the banks are involved in many risky investments and transactions, they face many risks. A few…

Q: Prudential regulation is generally seen to deal with: a. Systematic risks in the financial sector.…

A: Prudential risks are those that can reduce the adequacy of a firm's financial resources, and as a…

Q: open

A: Open market operations refer to the act of purchasing or selling the securities of the government by…

Q: How do disclosure requirements help limit excessive risk taking by banks

A: Basel norms: Basel norms are the norms which prescribes minimum capital which banks are required to…

Q: Answer the following questions to ponder: 1. What is the purpose of internal controls? 2. What…

A: An internal control is a plan of organisation for your business. It co-ordinates all systems used in…

Q: The concept of too big to fail creates a problem for? a. Bank manager b. Regulators c. Bank managers…

A: Too big to fail: It characterizes a company or trade division considered to be so profoundly…

Q: the Anti Money Laundering Council existence is to protect the integrity of the Financial and Non…

A: There will be systematic, broad based and far reaching implications in case there is no Money…

Q: Discuss the potential market failure in the diamond model of banking regulations

A: The diamond model in banking is also known as the dual principle-agent relationship model because it…

Q: Asymmetric information makes it hard for investors to sell securities. Banks, meaning both…

A: Asymmetric Information means the possession of greater knowledge by one than the other.

Q: Could efforts to avoid conflicts of interest lead an investment bank to provide poor service to a…

A: An investment is a financial institution that provides services to the company. Mainly, the clients…

Q: Do you think it is possible for depositors to discipline bank managers who are tempted to take…

A: The funds of the depositors are used by the bank managers in a manner that they consider best and…

Q: One of the greatest existential threats to the Islamic banking system is reputational risk. What is…

A: Reputational risk is quite significant as for as banking is concerned.Reputational risk is common…

Q: What caused the Silicon Valley Bank failure SVB? explain

A: Silicon Valley Bank was founded in 1983 and this bank was the primary subsidiary of SVB Financial…

Q: Which one of the following statements is true of E-commerce? a.It  involves the exchange of an…

A: E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the…

Q: To ensure market dominance by strong financial institutions. b.

A: Any regulation is made to make rational treatment of all the players, so a is incorrect   a. To…

Q: If bad credit risks are the ones who most actively seek loans and, therefore, receive them from…

A: In this scenario, bad credit risks actively seeking loans create a situation where the lender…

Q: Select all that are true regarding liquidity risk for a bank. O Consumer trust in the bank ensures a…

A: The answer is provided below.

Q: Explain briefly what are the different types of operational risks affecting the banking…

A: Operational Risk Management (ORM) Concept of Operational Risk Management (ORM) which was delivered…

Q: Match the correct type of bank risk with the appropriate associated statement. 1.The possibility…

A: Risk is referred as the possibility of the something bad happened. It also involves in an…

Q: Two types of financial risks faced by banks operating in the Financial sector and state how a risk…

A: Banks are eposed to some risks such as credit risk, operational risk, market risk and liquidity…

Q: Which of the following statements is/are true? Multiple statements may be true A bank borrowing from…

A: Yes, the statement "A bank borrowing from the central bank signals confidence to other market…

Q: Bank regulation cannot eliminate risk and does not prevent bank failure. It cannot guarantee that…

A: Bank regulation is an important part of the financial system that helps to protect the public from…

Q: Which of the following is NOT an advantage of depositing funds into a bank account (compared to…

A: Depositing funds with the banks is considered the safest investment and due to less risk it fetches…

Q: Explain two types of financial risks faced by banks operating in the financial sector, and discuss…

A: Financial Risk: The danger of losing money on an investment or business endeavor is referred to as…

Q: Financial intermedires play a crucial role in an economic crisis they are responbile for both…

A: Financial intermediaries are the middle person between the financial market and the investors. They…