CISI Risk - Chapter 2 Flashcards

1
Q

What do the BIS do (3)?

A

Research and cooperation in international banking regulation
Regulators regulator
Banking services for central banks

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1
Q

What is the BIS

A

Central Bank for central banks

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2
Q

Does the BIS have legal force?

A

No. Countries implement by making changes to their own law and regulations. The IBF facilitates this

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3
Q

What is the BCBS

A

Enhance understanding of supervisory issues and improve the quality of banking worldwide.

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4
Q

What is the Pillar 1?

A

Minimum level of capital

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5
Q

What is Pillar 2?

A

ICAAP assessment. Firms internal view of capital adequacy

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6
Q

What is Pillar 3?

A

Public disclosure & Market disipline

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7
Q

What kind of risk would a contagion be associated to?

A

Systemic

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8
Q

What type of regulation does the BCBS provide?

A

Prudential Regualtion

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9
Q

What is the equation for Basel 1 ?

A

Capital
——————————————– > 8%
Credit + Market + Operational

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10
Q

What 4 things are submitted to BASEL in pillar 2?

A

Risks not covered in Pillar 1
Way that risk is managed
Quality of controls infrastructure
Way in which the risk profile is calculated

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11
Q

What are the two NEW requirements for publication under Pillar 3

A

NSFR and LCR

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12
Q

What is the ‘Use Test’

A

Extent to which Risk-Based Decision Making is Embedded within the firm.

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13
Q

2 Evidence to support the use test

A

Senior Management review & Sing-off procedures.
Capital modelling (Scenario analysis & Stress testing)

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14
Q

In the home/host principle who is responsible for the regulation and activities?

A

Home

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15
Q

Home/Host principle - What is the Home

A

Parent company

16
Q

Home/Host principle - What is the Host

A

Operation in a foreign market

17
Q

Basel standards for Internationally active banks?

A

Apply full set of Basel Standards

18
Q

Basel standards for Non-International bank

A

Amended/local set of Basel Standards. Might use full set though.

19
Q

2 approaches to Regulatory risk?

A

Principle and statutory

20
Q

What is principal based approach?

A

High level binding objectives. Firms interpret principles and account for their actions

21
Q

What is Statutory approach

A

Rules based. Rigid rules that MUST be obeyed

22
Q

3 FCA Statutory objectivesd

A

Protect customers
Protect Financial Markets
Promote effective competition

23
Q

How is consumer protection managed (2)?

A

Conduct Risk
11 FCA Principles

24
Q

How are Business Standards managed? (1)

A

Conduct of Business rules (COBS)

25
Q

How are regulatory process managed? (1)

A

Risk-BASED REGUALTORY REVIEWS

26
Q

What

A