Department of Accounting and Finance
Contemporary Issues in Banking (N1620)
Seminar 4
1. What is credit risk and how it can be measured? What is difference between standard approaches to credit risk to internal-rating-based approach? What techniques do bank use to mitigate credit risk under the standard approach? How Off-Balance activities can increase credit risk exposure especially securitization? Provided Examples MBank
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2. Define different type of interest rate risk and distinguish between reinvestment and refinancing risk? What are rate -sensitive assets and liabilities? What is Interest Rate Risk in the banking book?
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Lecture slides
3. Explain importance of capital risk. How do we measure leverage ratios for banks? How is this difference from calculations for firms?
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4. What is distinguishes operational risk from technology risk? Explain the interactions between market risk and rogue trader risk? What are main components of operational risk based on standard approach?
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