CAIIB RISK MNG LIVE Class 5 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 66 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 various risks to protect the bank's capital and earnings while enabling sustainable growth.
What is the definition of Exposure at Default (EAD) in credit risk modelling?
Total exposure a bank faces at the time of borrower default.
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 the Standardised Approach for measuring credit risk capital requirements?
Uses fixed risk weights assigned by regulators to asset categories.
How is Credit Risk defined in the context of banking operations?
Credit Risk is the risk of loss arising from a borrower's failure to meet their contractual obligations, including default on principal or interest payments.
What is the Maturity (M) parameter used for in the Advanced IRB approach?
It measures the effective remaining maturity of a credit exposure.
What does Value at Risk (VaR) measure in risk management?
VaR measures the maximum potential loss in value of a portfolio over a defined period for a given confidence interval, typically 95% or 99%.
What is the difference between Foundation IRB and Advanced IRB approaches?
Foundation IRB uses regulator estimates; Advanced IRB uses bank's own estimates.
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