11.1: Financial Institutions

Question 1

Financial institutions differ from other companies as follows:

Answer 1

Systemic importance.
Regulated.
Assets.

Question 2

The three pillars of the Basel III framework

Answer 2

maintenance of minimum levels of capital, liquidity, and stable funding.

Question 3

Basel III framework - maintenance of minimum levels of capital

Answer 3

based on the risk of the bank’s assets.

Question 4

Basel III framework - liquidity

Answer 4

bank should hold enough liquid assets to meet demands under a 30-day liquidity stress scenario.

Question 5

Basel III framework - stable funding.

Answer 5

stable funding relative to a bank’s liquidity needs over a one-year time horizon.

Question 6

Financial Stability Board

Answer 6

coordinate actions of participating jurisdictions in identifying and managing systemic risks.

Question 7

International Association of Deposit Insurers,

Answer 7

seeks to improve the effectiveness of deposit insurance systems.

Question 8

International Organization of Securities Commissions (IOSCO)

Answer 8

seeks to promote fair and efficient security markets.

Question 9

International Association of Insurance Supervisors (IAIS)

Answer 9

seeks to improve supervision of the insurance industry.