Question

List three control risk of ANZ, explain why, state in detail.

Answer 1

Answer-

Three control risk of ANZ are

1) Market Risk
2) Credit Risk
3) Operational Risk
4) Strategy and Business risk

1) Market Risk-

On the basis of Value of Risk (VAR), ANZ is comparatively better placed than the other major Australian banks with lowest trading risk profile.
VAR Limits are monitored daily by the independent Market Risk Unit and investigated and appropriate action is taken and reported to the Credit & Trading Committee.
VAR accumulated at higher levels takes into account correlation and diversification effects across portfolios.

2) Credit Risk

The risk arises due to default of loans taken by customers.

Larger loans disbursal requires good judgement, rating tools which can assess risk and dual approval process.

3) Operational risks

Some risk arise due to failed internal processes, people and systems and external events.

These risks can be classified as risks by Disasters like Earthquakes, Storms and fire and Pandemics, Regulatory breaches, Regulatory breaches, War and Political unrest and Litigation.

4) Strategy and Business risk

The loss happens due to wrong strategy adopted in business

Business Risk is the risk that arises due to lost in value through the selection of specific business directions or due to changes in the group’s overall business model.