CAIIB · BFM · Chapter 7

Liquidity Risk Management

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.

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One-liners from this chapter

Free sample — 8 of 120 rapid-fire Q&A cards.

Q

Buyer Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Exporter; Typical Trigger: Non-acceptance, non-payment, quality dispute

Q

Seller Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Importer; Typical Trigger: Non-shipment after advance, delayed / poor-quality shipment

Q

Shipping Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Both; Typical Trigger: Carrier delay, mishandling, port disruption

Q

Credit Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Exporter & financing bank; Typical Trigger: Buyer insolvency / protracted default

Q

Legal Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Both; Typical Trigger: Law change in either country

Q

Country / Political Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Both & banks; Typical Trigger: Sovereign action, war, civil disturbance

Q

Operational Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Both; Typical Trigger: Strikes, system failure, supplier disruption

Q

Exchange Risk — Who is Exposed? / Typical Trigger?

A

Who is Exposed?: Both; Typical Trigger: FX rate movement between contract & settlement

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