CAIIB BFME Module B & C By Ashish Sir Class 10
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of risk management in banks?
The primary objective is to identify, measure, monitor, and control risks to protect the bank's capital and earnings while supporting its business strategy.
What is the Advanced Measurement Approach (AMA) for operational risk?
A bank's own models to calculate operational risk capital requirement.
What are the three main pillars of Basel II framework?
The three pillars are Minimum Capital Requirements (Pillar 1), Supervisory Review Process (Pillar 2), and Market Discipline through disclosure (Pillar 3).
What is the meaning of Economic Capital in bank risk management?
Capital estimated internally to cover all risks beyond expected losses.
What is Value at Risk (VaR)?
VaR is a statistical measure that estimates the maximum potential loss in value of a portfolio over a defined period for a given confidence interval, typically 99% or 95%.
What is Maturity Mismatch Risk in banks?
Risk from mismatch between asset and liability maturities causing funding gaps.
What is Credit Risk in banking?
Credit risk is the risk of loss arising from a borrower's failure to repay a loan or meet contractual obligations, leading to a potential default that results in financial loss to the lender.
What is the significance of Tier 1 capital in Basel III?
Core capital absorbing losses while bank remains a going concern.
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