that their branches are offering marketable interest rates

Referencing Styles : APA Question 1 Researchers have established that the size of a Bank and interest rate charges on advances and facilities can impact on its profitability. Bank managers therefore have a crucial role in ensuring that their branches are offering marketable interest rates while making profits. a) Review this statement and elaborate on three (3) ways that a Bank’s size can impact its profitability. [937 words] b) Provide a detailed discussion on the role of Bank managers within the scope of interest rate risk management spectrum. [313 words] TOTAL WORDS : 1,250 WORDS Question 2 Asset-liability management is a technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Whereas, the Asset Liability Committee (ALCO) is a risk-management committee in a bank or other lending institution that generally comprises the senior-management levels of the institution. The ALCO’s primary goal is to evaluate, monitor and approve practices relating to risk due to imbalances in the capital structure. The ALCO will have responsibility for setting limits on the arbitrage of borrowing in the short-term markets, while lending long-term instruments. Among the factors considered are liquidity risk, interest rate risk, operational risk and external events that may affect the bank’s forecast and strategic balance-sheet allocations. The ALCO will generally report to the board of directors and will also have regulatory reporting responsibilities. a) Draft a terms of reference of ALCO charter indicating its purpose, membership of the committee, committee meetings and operations, duties, responsibilities and authority of the committee and ALCO reporting line. [937 words] b) Risk associated with Liquidity if not properly managed can result in bank cash flow problems. Identify and provide details on the three types of Liquidity Risks. [313 words] TOTAL WORDS : 1,250 WORDS Question 3 Studies exploring the complex interactions between competition and stability in retail and commercial banking come to the ambiguous conclusion that competition can be both good and bad for stability. Policy measures that strike an acceptable balance remain elusive. a) Evaluate and explain in detail credible and justified actions that banks should be focusing on towards managing competition in the future. [937 words] b) Highlight and discuss key risk issues that need to be carefully managed under competitive banking environments. [313 words TOTAL WORDS : 1,250 WORDS Question 4 Having a “Banking Watch List” is a key tool in being proactive to solving current banking challenges especially in its operation and lending activities. Lending is a core activity of banks. Reckless lending can cost bank huge losses in exposures. Banks therefore have a core responsibility in managing their assets so as not to be over exposed. In its lending portfolio, there are keys and primary risks associated with liquidity management and these need to be identified and managed efficiently. a) Discuss into detail the top five major issues on today’s Banking Watch List. [521 words] b) Discuss the circumstances under which a Bank’s Credit Risk portfolio becomes exposed. [521 words] c) Identify and discuss three (3) of such primary risks. [208 words] TOTAL WORDS : 1,250 WORDS

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