1. (a) Discuss the main causes of illiquidity and insolvency in
banking and discuss the relationship between them.
(b) Explain operational risk and market risk as it affects banks.
Give examples.
(c) Explain credit risk as it affects banks and discuss the
techniques banks can use to manage the moral hazard created by a
credit risk exposure.
1.
(a) Discuss the main causes of illiquidity and insolvency in
banking and discuss the relationship between them.
(b) Explain operational risk and market risk as it affects
banks. Give examples.
(c) Explain credit risk as it affects banks and discuss the
techniques banks can use to manage the moral hazard created by a
credit risk exposure.
A. Define and describe Insolvency Risk.
B. Describe the two best protections against insolvency at a
Financial Institution.
C. Describe a situation where Insolvency Risk could be caused 1)
by Liquidity Risk; 2) by Credit Risk.
(I want you to type the anwer)