CAIIB RISK MNG LIVE Class 2 By Ashish Sir
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Risk Management (Elective) — 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 banking?
The primary objective is to identify, measure, monitor, and control risks to protect the bank's capital and earnings while ensuring financial stability.
What is the Loss Given Default (LGD) in credit risk modeling?
Percentage of exposure lost when a borrower defaults.
What are the three 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 Exposure at Default (EAD) in the context of IRB approach?
Total exposure amount a bank faces at the time of default.
How is Credit Risk defined under RBI guidelines?
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 on the bank's assets.
What is a Credit Rating Migration Matrix used for in banks?
Tracking probability of rating changes over a time period.
What does the term 'Expected Loss' signify in credit risk management?
Expected Loss (EL) is the average loss a bank anticipates over a given period, calculated as the product of Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD).
What is the purpose of the Credit Risk Mitigation (CRM) techniques under Basel II?
To reduce credit risk exposure through collateral, guarantees, and netting.
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