Question
Which of the following metric of the bank is dependent
on the movements of the interest rate?Solution
The management of Interest Rate Risk should be one of the critical components of market risk management in banks. The Net Interest Income (NII) or Net Interest Margin (NIM) of banks is dependent on the movements of interest rates. Any mismatches in the cash flows (fixed assets or liabilities) or repricing dates (floating assets or liabilities), expose banks’ NII or NIM to variations. The earning of assets and the cost of liabilities are now closely related to market interest rate volatility
Consider the following with reference to the International Swaps and Derivatives Association (ISDA).
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How capital adequacy ratio is calculated:
According to the Union Budget 2023-24, consider the following statements regarding Cooperation:Â
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_________ is the risk of loss that arises due to breakdown in the internal procedures, people and systems or from external events
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2)It was e...
