FINS3630 ASSIGNMENT Case Study Solution
Credit risk mitigation:
The financial institution applies different techniques to lower down the risks to lenders and other businesses which are offering credit. The deutsche bank foresees that they are complying with the regulations set by the accounting risk disclosures and adhere to their principles. To determine the credit risk, the bank uses Advanced Internal Ratings Based Approach which allows the company to be specific about the risk parameter. Through this, the probability of default for customer is determined quite well and then it makes it possible for them to reduce the number of defaults. This also includes borrower ratings that is made out of internally developed rating models which specifies distinct customer-relevant criteria. A company can differentiate between a good borrower and the one whose chances are high to default.
Capital requirements:
Capital resources cushions unexpected losses which comes under capital supply quantification. Furthermore, the bank looks after its capital adequacy through, ICAAP which gives the bank capital adequacy assessment. If the capital requirements fall below the bar, the bank quickly works on that and fulfils the required capital requirement. It ensures that the bank is having the required amount of capital in the case of crisis as it covers its risks.
Liquidity Risk Management:
The evaluation of liquidity risk is conducted on the basis of liquidity management ratios which is conducted by the lenders and the investors. It is done by comparing short term liabilities of a bank with the liquid assets, which further gives a precise idea if the bank should focus on their debt obligations or continue with the additional investments. The banks that are highly leveraged will look to lower down its debt obligations because it becomes highly risky as they have few assets to move around. The banks pays great attention in scrutinizing their liquidity so that they do not get bankrupt. Heavy standards are imposed by the Basel 3 regulations which is complemented with stress tests to check the liquidity management. (Deutsche Bank, 2017)..........
This is just a sample partical work. Please place the order on the website to get your own originally done case solution.
Related Case Solutions & Analyses:
Are Iranian Consumers Poised to Buy American in a Hostile Bilateral Environment
Its All About Sales
Monroe Clock Company (B)
Whirlpools Roadmap in China: 2004
Challenges for the Minuto de Dios (B)
Note on the Venture Capital Industry
Note on Option Pricing
ENGLISH CENTRE FOR NEW COMERS
The effect of active role of non-profit Organization on the incarceration of African American males
Assignment
