CAIIB BFME Module B & C By Ashish Sir Class 12
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 of risk management in banks is to identify, measure, monitor, and control various risks to ensure the bank's financial stability and protect its capital and earnings.
What is the Capital Conservation Buffer (CCB) required under Basel III?
2.5% of risk-weighted assets in common equity tier 1
What are the three main types of financial risks faced by banks under Basel framework?
The three main types of financial risks are credit risk, market risk, and operational risk, all of which require capital allocation under the Basel framework.
What is the Countercyclical Capital Buffer (CCyB) under Basel III?
0-2.5% buffer activated during periods of excess credit growth
What is Value at Risk (VaR) and how is it used in banks?
Value at Risk (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; banks use it to quantify market risk exposure.
What is the leverage ratio requirement introduced under Basel III?
Minimum 3% Tier 1 capital to total exposure
What does the term 'liquidity risk' mean in the context of bank financial management?
Liquidity risk is the risk that a bank may be unable to meet its financial obligations as they fall due without incurring unacceptable losses, arising from mismatches in the maturity of assets and liabilities.
What is 'gap analysis' in the context of interest rate risk management?
Measures mismatch between rate-sensitive assets and liabilities over time buckets
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