Chapter 6: Central Risk Committees

Question 1

What is the central risk committee of the bank

Answer 1

committees at the group level that monitor risks

Members include managing director, division head or member of the board of directors

Question 2

what is the group credit committee

Answer 2

focuses on credit risks
* country limits
* limits per business sector
* credit portfolio quality
* credit margin of portfolio
* Approves major individual credit facilities

Question 3

What is the Asset and Liability Committee

Answer 3

Manages risks w/ composition of bank balance sheet
* supervise treasury
* Oversee bank’s own funding composition

Question 4

What is the Market Risk Committee

Answer 4

Focuses on new products on financial markets

Uses models to determine value/risk of products

Question 5

What is the Operational Risk Committee

Answer 5

Forms general policy and procedures for operational risks
* Qualitative: rank/prioritize risks per business unit
* Quantitative: e.g. Set up database of losses from operational errors or use a program to predict losses