commercial banking questions. (Finance)

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1)Discuss the process of estimating the cost of deposit accounts.

2)How has the use of "hot money" affected bank's liquidity risk?

3)When calculating its cost of funds, should a bank use average or marginal costs?  Why?

4)What is the purpose of having a correspondent bank relationship?

5)Briefly explain two models used to estimate the cost of equity?

6)Discuss the advantages and disadvantages of a bank holding less cash.

7)Discuss the major components of a bank’s contingency funding plan.

8)What is a “bankers’ bank”?

9)Why do banks prefer a lagged reserve accounting system to a contemporaneous reserve accounting system?

10)How can pledging requirements make bank assets less liquid?

11)Discuss the rationale behind risk-based capital requirements.

12)What are some of the weaknesses behind risk-based capital standards?

13)Why do smaller banks often have a more difficult time raising new capital compared to larger banks?

14)What is "moral hazard" and what is its impact on deposit insurance?

15)Discuss the “three-pillars” in Basel II.

 

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