Risk management

COLLEGE OF BANKING AND FINANCIAL STUDIES

DEPARTMENT OF UNDERGRADUATE PROGRAMME

B.Sc. in Accounting, Auditing and Finance

Individual Assignment

Assessment Component 20 %

Student Name
Student ID
Semester	3	Fall 2020-2021
Assignment Title	Credit and Liquidity Risk Management

Module code and Title	UG 117 -RM-Risk Management	Assessor:	Joyce Noronha
Start Date:	Morning Batch: 1/11/2020 Evening Batch: 2/11/2020	Internal Verifier	Ms Sujatha Bhat
Due Date:	November 22 and 23 for morning and evening batches respectively

Required Work, Format and Grading

You must submit the following by the assignment due date: · Completed answers to each task, making sure that you fully address each assessment criteria · Each question to be answered on a separate page · Assignment must be uploaded on Turnitin

Resources: You should apply relevant theories to the tasks included in this assignment The structuring of your analysis should indicate your understanding of the subject You can access Internet to research the topic. You should demonstrate good academic practice by the appropriate use of academic texts and journals. Your work should be properly referenced

Guidelines and further information about assignment:

Assignment must be submitted on turnitin. High similarity index (with submissions from CBFS students, form one site etc.) will require review of your work.

Student declaration:

I certify that the work contained in this assignment was researched and prepared by me:

Signature: ___________________________ Date:

MORNING

Class ID: 27051071 Enrolment Password: UG117M

EVENING

Class ID: 27051083 Enrolment Password: UG117E

Submission time and date

Assignments must be submitted by the due date. You will not be able to submit after the lapse of due date as the turnitin window will be closed. You may include diagrams, figures etc., without word penalty.

Plagiarism Writing

1. Plagiarism occurs if you use somebody else’s work in an assignment or exam answer but fail to state where you got the material from. You need to be also very careful about the amount of words you are using from somebody else’s work.

2. It can happen in any type of assessment where you are given the questions or tasks in advance.

3. If another student uses your work in his/her answer(s), both you and he/she will be punished when caught.

4. Punishments for committing plagiarism can be very severe.

Details

Plagiarism is a form of cheating in which students use the work of others and present it as their own. It may include all or any one of the following:

1. Copying extensively from the work of others (from sources such as books, magazines, journal, websites etc.) and submitting the work as your own.

2. Copying another student/s’ work and submitting it for assessment under your own name.

3. Allowing another student to copy your work and then submit it for assessment under their own name.

What happens if you get caught?

The examining body of CBFS may punish offending students in any manner that they deem fit. The College has in place A plagiarism Policy which outlines the action that may be taken against students who have been caught plagiarizing. Typical punishments may range from reduction in grades, making students repeat modules and even failing students on a module or an entire award. The college has zero tolerance to plagiarism. Therefore, be forewarned!

Scenario or Tasks

This assignment is based on

Learning Outcome 2: demonstrate knowledge and understanding of how financial institutions manage credit risk and liquidity risk

The Assessment Criteria are:

1. provide a basic definition of risks

2. understand the importance of liquidity to banks and to the economy

3. recognize the importance of sound credit risk and liquidity management within banks

4. provide a suitable definition of credit risk and liquidity risk

5. identify the common failings of banks in relation to managing credit risk

6. define the sources and types of liquidity risk and how it is measured and managed

There are THREE tasks. Total 20 Marks ( 5+10+5)

Task 1: Scenario

Samiha owns SWEET BIG BITES Cakes and Pastry Shop in Al Ghobra. She has approached your bank for the following financial assistance

1. Term Loan to replace the equipment and furnishing of her shop

2. Increase in the working capital limit she currently has.

You are part of the team responsible for assessing Samiha’s request.

Required

a. Explain the procedure involved in determining whether it is possible to approve the request.

b. Give a list of documents you will require from Samiha to assess the proposal.

The word limit for this answer including intext references is 600 words.

(Maximum Marks: 5)

Task 2: Regulators both national and international keep a tight watch on the credit risk exposure of banks. Explain this statement with reference to the following

a. Reasons for managing credit risk exposure

b. Credit risk management framework

c. Credit risk culture

d. Credit risk mitigants

You may refer CBO Circular BM 955 and 977

The word limit for this answer including intext references is 1200 words.

(Maximum Marks: 10)

Task 3: “Throughout the global financial crisis which began in mid-2007, many banks struggled to maintain adequate liquidity. Unprecedented levels of liquidity support were required from central banks to sustain the financial system and even with such extensive support several banks failed, were forced into mergers or required resolution.” (BCBS 165). Using this statement

a. Assess the importance of sound liquidity management within banks

b. Explain sources and types of liquidity risk and how it is measured and managed

You may refer CBO Circular BM 955

The word limit for this answer including intext references is 600 words.

(Maximum Marks: 5)

END OF ASSIGNMENT

ASSIGNMENT GENERIC – RUBRIC

Marks/Grades 90-100 85-89 74-84 56-73 50-55 0-49

Criterion A A- B C D F

Knowledge Shows well-

coordinated

understanding

of subject

Sound

understanding of

subject matter

Major facts are

understood

Shows

understanding of

basic issues/theory

Minimal

understanding of

basic issues/topic

No understanding of

the topic/subject

area

Analysis Touches upon

all relevant

issues/theory.

Concise analysis

Detailed

coverage of basic

concepts/theory.

Reasonable

coverage of

subtle

issues/theory

Reasoned

argument and

sequencing

Shows evidence of

understanding of

concepts. Coverage

of obvious ideas.

Fails to identify

subtle issues/theory.

Captures obvious

ideas.

No or minimal

understanding of the

key theories/topic

Research Excellent

referencing and

reading in all

areas

Use of up to

date resources.

Well informed

and generally

accurate

information

provided. Clear

referencing

Appropriate

referencing

Adequate

referencing and

reading.

Weak reading and

referencing

Poor referencing.

Shows lack of

reading/references

out of date

Relevance All material

used is of

relevance

Material used is

relevant

Discussion

shows

relationship to

theory

Some material

repetitive

Some repetitive

matter. Irrelevant

No relevance to

subject matter

Conclusion Excellent

conclusion.

Brings together

all concepts and

adds an original

perspective

Intelligent

conclusion. Good

application of

knowledge

Methods

incorporate

modifications

used

Conclusion in place

but key points

missing.

Reasonable

application of

knowledge

Weak conclusion and

content. Satisfactory

application of

ideas/theory

Poor conclusion.

Poor knowledge

application.