What has been the historical loss rate on loans and investments What losses are

What has been the historical loss rate on loans and

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payment or delayed payment. What has been the historical loss rate on loans and investments? What losses are expected in the future? How prepared is the institution to weather the losses? Liquidity Risk The current and potential risk to earnings and the market value of stockholder’s equity that results from a bank’s inability to meet payment or clearing obligations in a timely and cost- effective manner. Liquidity risk is greatest when a bank cannot anticipate new loan demand or deposit withdrawals, and does not have access to new sources of cash. Funding liquidity risk is the inability to liquidate assets or obtain adequate funding from new borrowing. Marker liquidity risk is the inability of the institution to easily unwind or offset specific exposures without significant losses from inadequate market depth or market disturbances. Operational Risk Business interuptions, Transaction Processing, Inadequate Information Systems, Breaches in Internal Controls, Client Liability. Legal Risk Reputation risk Capital or Solvency Risk Liabilities > Assets Off-Balance Sheet Risk NOTE: The risk that a bank cannot meet payment obligations in a timely and cost-effective manner is known as; Liquidity Risk.NOTE: Which type of risk is the most difficult to quantify? a)Credit Riskb)Liquidity Riskc)Legal Riskd)Operating Riske)Market Risk
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