Risk Management effective operations of the company. Transaction and portfolio level risk. let's learn
Liquidity: Funding risk(withdrawal and FD non renewal), Time risk ( NPA Account no cash flow), Call risk (Crystallization of contingent liabilities,
Interest rate risk: Interest rate adverse movement, GAP (A-L maturities), BASIS (change in interest rate assest and liabilities net interest [investment]), YIELD Curve risk internal RR Inverse relation, Embedded option CC OD TL Prepayment,
Market risk : Mark to market
Credit risk: COUNTER PARTY,DEFAULT Borrower NON PERFORMANCE refusal
Counter party risk : BORROWER NON PERFORMANCE DUE TO COUNTRY
Operational risk: Flood fires documentation failed internal procedures
Transaction and Compliance risk.
Strategic and Reputation Risk
Systemic risk Fall of all banks due to big bank..
4 TYPES OF RISK IN CAIIB BFM SHORT NOTES BANKING IN DETAIL
Identify
Assessment
Mitigate
Monitor
RISK MITIGATION
CREDIT RISK
INTEREST RATE RISK
FOREX RISK
FORWARD AND FUTURES CONTRACT : POST
Forward contract for IT companies contract future software usage and payment as per prevailing rate(Price predetermined, Time predetermined,
Future contract for : for FARMER(Mango) PRICE AND TIME NOT predetermined
Credit derivative for mitigation of credit risk, contract b/w creditor and debtor
Diversification of risk through credit derivatives. .
Books : Banking book(Credit risks, Trading Book (Equity),
Off-Balance sheet exposure,
CY = CR/CMP
TT BUYING AND TT SELLING
BILL BUYING AND BILL SELLING