CAIIB BFME Module B & C By Ashish Sir Class 8
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 66 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 risks to protect the bank's capital and earnings while ensuring continued profitability and solvency.
What is the Advanced Measurement Approach (AMA) for Operational Risk capital?
A bank's own internal loss data models calculate capital requirement.
What are the three pillars of Basel II framework?
The three pillars of Basel II are: Pillar 1 (Minimum Capital Requirements), Pillar 2 (Supervisory Review Process), and Pillar 3 (Market Discipline through disclosure).
What is the Basic Indicator Approach (BIA) for Operational Risk?
Capital is 15% of the average annual gross income over three years.
What is Credit Risk in the context of bank financial management?
Credit risk is the risk of loss arising from a borrower's failure to repay a loan or meet contractual obligations, and it is the most significant risk faced by commercial banks.
What is Market Risk and what instruments does it affect?
Risk of loss from adverse market price movements in traded instruments.
How is Market Risk defined under Basel framework?
Market risk is the risk of losses in on- and off-balance sheet positions arising from movements in market prices, including interest rates, equity prices, exchange rates, and commodity prices.
What is the difference between Specific Risk and General Market Risk?
Specific risk is issuer-related; general risk is from broad market movements.
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