RISK MANAGEMENT FRAMEWORK
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 a Risk Management Framework in a bank?
The primary objective is to identify, measure, monitor, and control risks to ensure the bank achieves its strategic goals while maintaining financial stability and regulatory compliance.
What is the meaning of 'risk universe' in a bank's risk management context?
Complete set of all risks a bank may face
Which RBI guideline mandates that Indian banks establish a comprehensive Risk Management Framework?
RBI's Guidelines on Risk Management Systems in Banks (based on Basel Committee recommendations) mandate that all scheduled commercial banks establish a board-approved Risk Management Framework.
What is the role of the Asset Liability Management Committee (ALCO) in risk governance?
Manages market and liquidity risk at the senior management level
What are the three pillars of the Basel II Accord that underpin modern bank Risk Management Frameworks?
The three pillars are Minimum Capital Requirements (Pillar 1), Supervisory Review Process (Pillar 2), and Market Discipline through disclosure (Pillar 3).
What does 'risk aggregation' mean in the context of enterprise risk management?
Combining individual risks to assess overall bank-wide risk exposure
What is the role of the Board of Directors in a bank's Risk Management Framework?
The Board is ultimately responsible for approving the bank's risk appetite, risk management policies, and oversight of the overall Risk Management Framework through the Risk Management Committee.
What is a Risk Appetite Framework (RAF) and who approves it in a bank?
RAF defines risk limits and is approved by the Board of Directors
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