List Of Descriptive Statistics Of Rate, The Index ( Weighted ) Risk Disclosure Index

Since the onset of the financial crisis 2008, the sovereign debt crisis in western economies and the new financial regulation with Basel III coming up, the financial industry faces the challenge of reinventing itself. The ring-fence for Commercial and Investment Banking, and new economic and regulatory capital requirements will determine the kinds of products banks will be able to distribute. It will have a huge impact in the Investment Banking business, which will suffer tough regulation and supervisory procedures. At the same time, credit risk models will be reviewed because they have failed to predict the crisis of 2008. The current financial and economic crisis doesn’t have any precedent in the past.

Changes however have brought upon limitations in analytical approaches, risk assessment by the Federal Reserve, and transparency. Most of these changes by the Federal Reserve have not always followed its own guidance or principles. For example, when quantitative assessments are performed the Federal Reserve bases its determinations on the results of both the supervisory and company-run stress tests. This would in turn create tension between institutions’ desire to avoid failing the CCAR quantitative assessment and the power of their stress test decisions. When the Federal Reserve includes company-run stress tests in the CCAR quantitative assessment, they limit the risk-management and capital planning benefits for participating companies without increasing the effectiveness of the quantitative assessment. Another example of the Federal Reserve steering from its own principles is within qualitative assessment disclosure and communication. In this area, transparency is the main problem because the Federal Reserve does not publicly disclose information that allows for a better understanding of its assessment methodology. Also, the companies that must meet these expectations annually may face challenges from the irregular timing of communications. This in turn could limit the achievement of the Federal Reserve’s CCAR

Beside internal factors, we examine the external factors, Opportunities and Threats, of KBRA. The incumbent credit raters’ fail in the financial crisis gave an opportunity for new rating agencies like KBRA. After the financial crisis, the government and the investors realized the importance of appropriate corporate credit rating. The government might tend to subsidize newly-established rating organizations and create new regulations for credit rating in order to eliminate the oligopoly of three big financial agencies. KBRA benefits from such environment. Also, it is easier for small or new rating agencies like KBRA to apply a new revenue model under revised regulations.

b) The ratings methodologies employed by these various bond rating agencies are a mixture of financial performance, information and subjective objectives and management quality information. All of this information is synthesized for the purpose of using it to predict the creditworthiness of the bond issuer, which is inversely related to the risk of default. Based on the above bond rating methodology,

In commercial banking, capital adequacy ratio (CAR) is used to monitor a bank’s situation of capitalization by regulators and managers. CAR is calculated as the sum of tier 1 capital (equity and retained earnings) and tier 2 capital (subordinated debt and reserves) and dividing it by its risk-weighted assets. SDB’s CAR decreased from 10.6% in December 2001 to 9.5% in December in 2002, but still above the Chinese regulatory floor of 8%. It is particularly worth mentioning here that SBD’s CAR was 0.7% higher than the average CAR of other five joint-stock banks in 2002. Not all the time the CAR is good if high; a high CAR means that a bank’s large amount of money is stuck in

According to Malaysia Sukuk Market Handbook it said that credit rating especially focus in credit risk, analyse situation where one financial obligation or commitment may become lost based on a change in capacity and obligation underwriter readiness meet the financial commitment on time and in line with transaction terminology. As risk payment measurement refuse, sukuk consider place various sukuk type in market in their relative default risk matter.

Credit analysis is the process by which financial institutions examine the creditability, credit history and financial situation of a client or potential borrowers. No bank or moneylender would wish to jeopardize their money, therefore necessitating this process. At the same time, for bond portfolio managers or investors to debt issuing companies, the basis of their credit rating and financial situations also need to be established. The process of investigation to get this information also defines credit analysis. Credit rating is an important instrument used by lenders when performing credit analysis of bond issuing institutions or individuals.

This study presents a comprehensive assessment of the interest rate risk. Risk is an expression of severity and possibility of loss that applies to every operation or human activity in all spheres of life (Kulpa, & Magdoń, 2012). The Basel II Accord, as a cornerstone of a formal quantitative framework of risk management, proposed to quantify interest rate risk by requiring that financial institutions retain a minimum level of capital to guarantee that obligations are met (Entrop, Wilkens, & Zeisler, 2009). Interest rate risk substantially affects the institution’s asset and liability sections of the balance sheet. In this paper, I will examine the re-pricing model for measuring interest rate risk exposure, discuss the benefits of utilizing duration for measuring interest rate risk in financial institutions and evaluate how interest rate risk can be managed.

CRAs are like a marking system that is designed to keep the interested/related parties informed with relevant information. It helps investors to decide how risky it is to invest in certain security or country. It gives indication to buyer of securitised debt how likely they are to be paid back. Although investors collect their own set of information about borrowers and impose requirements, they also rely on these ratings to determine the appropriate securities for their investment portfolios because it is believed that CRAs crucial role is to provide ‘gatekeepers’ to public security markets and act as a neutral third-parties providing independent, objective assessment of the creditworthiness of investments offered, firms and

The banking sector has sound fundamentals. Banks are highly capitalized. As of July 2017, the BCRA reports that banks have a capital compliance rate (qualified capital/ risk-weighted assets) of 14.7%. This exceeds the requirements by 79%. Banks have been significantly over the capital requirements for the previous five years. Liquidity indicators are strong. The broad liquidity ratio in July was 45.4%, while the liquidity ratio excluding BCRA securities stood at 29.6%

The cost of credit in Uganda is still very high with prime lending rates averaging 15 percent. Interest rate spreads— one of the measures of the efficiency of the banking sector and therefore instrumental in the mobilization of investible

Interest rate risk is the risk where changes in market interest rates might adversely affect a bank’s financial condition.  The management of Interest Rate Risk should be one of the critical components of market risk management in banks. The regulatory restrictions in the past had greatly reduced many of the risks in the banking system. Deregulation of interest rates has, however, exposed them to the adverse impacts of interest rate risk.

It is inherently difficult to predict the timing and intensity of a systemic banking crisis. Therefore, informs our strictly ordinal definition of credit quality. It is not the absolute (cardinal) level of default risk that matters, but rather the rank-order of default risk among all banks. In order to reduce the cost of processing bank accounting information, banks’ public reporting requirements should be vastly enhanced to facilitate cheaper and better credit analysis. In most countries, bank regulators protect their privileged data access, and do not share crucial bank data publicly (or even with other bank regulators) in a narrow pursuit of their own agency power and to shield themselves from accountability. Future bank regulation therefore needs to create an entirely new information environment for external credit analysis. Better public information and more bank reporting is the best strategy to reduce the exorbitant influence of credit rating agencies in the current system.

ii. Banks policy did not permit to disclose various data and information related to Credit Portfolio.

Presently loan classification has become a burning question for the overall banking sector. The monitoring of the central bank is also intensified. All the information and data are collected from the bank might not reflect actual figure due to its sensitivity of nature. The loan classification trend is a vast subject requires detail study, which is not carried out due to time constraint of the internship program. MBL is extremely new in the banking sector, having a negligible amount of classified loan; therefore its debt default trend may not match with the mainstream of classified loan.