Free Essay

Stress Tests Bank

In:

Submitted By synethic
Words 267
Pages 2
GOALS:

o WE DECIDE THE TOPIC o o STRUCTURE AND RESEARCH OF OUR PROJECT

o SEPARATE THE WORK AND START LOOKING AT IT

o SET OUR NEXT MEETING POINT (NEXT WENDESDAY) FOR UPDATE AND DISCUSSION

o ACTUALLY LEARN SOMETHING FROM THIS PAPERWORK

o MAKE AN EXCELLENT PRESENTATION

PART 1 (THEORY)

• INTRODUCTION
• SUMMARY
• METHODOLOGY

• STRESS TESTS- GENERAL PROPERTIES

WHAT ARE STRESS TESTS

WHAT ARE STRESS TESTS IN BANKS

-HISTORICAL REFERENCE (How, when, by who started)

- NEED OF THE STRESS TESTS -DISCRIPTION OF THE TESTS

• KIND OF TESTS (sensitivity tests, scenario tests, frequency of test)

ANALYSIS OF SENSITIVITY PARAMETERS (market risk, Interest risk, Credit risk, Liquidity Risk)

ANALYSIS OF SCENARIOS (definition, kind of scenarios) -FINANCIAL PREREQUIERMENTS SET FOR THE TEST

-EVALUATION OF BANKS UNDER THE TESTS

-SAFETY ISSUES AND CONTROL

-IDENTIFICATION OF VULNERABILITIES OF THE SYSTEM

-A FRAMEWORK FOR SYSTEMIC-RISK STRESS TESTING (First systemic risk stress-testing is contrasted with stress-testing for individual banks, the analysis provides definitions of systemic stress) .

• RESULTS OF THE STRESS TEST ( comparison with other years data)

BANKS (which banks are included, requirements, banks failed why)

WHAT NEEDED TO BE DONE FOR THE BANKS THAT FAILED

INTERPRET THE RESULTS AND SECOND ROUND EFFECTS

PART 2 (RESEARCH)

1) SCENARIO OF ZERO GROWTH IN ECONOMY

2) MORE SIGNIFICANT LIQUIDITY SHOCK CHANGE

3) STUDY THE SCENARIOS AND CHANGE PARAMETERS

4) NEGLECTED DIMENSIONS OF STRESS TESTS

5) DOES AGGREGATE STRESS TESTING MODEL PROVIDE CORRECT ESTIMATE OF THE IMPACT OF THE CRISIS
ON THE BANKING SYSTEM?

6) IDENTIFICATION OF SIGNIFICANT RISK FACTORS AND THEIR EXPECTED RELATION TO THE CREDIT
RISK FACTOR

7) VARIATIONS IN STRESS TESTING ACROSS INSTITUTIONS

Similar Documents

Free Essay

None

...Nuclear Medicine Technologists are responsible for independently performing a full range of routine. non- routine, research and new radionuclide studies to include PET/CT. The responsibilities of the nuclear medicine technologist include an empathetic and instructional approach to patient care, the preparation, calibration and administration of radiopharmaceuticals and pharmaceuticals under the direction of an authorized user (nuclear medicine physician) the performance of quality control procedures, the operation of imaging, laboratory and computer instrumentation and the application of accepted standards (ALARA)of radiation safety and protection. The Technologist works within the guidelines from the Nuclear Regulatory Commission (NRC), Department of Transportation (DOT), National Health Physics Program, Occupational Safety and Health Association (OSHA) among others. Continuing education is a necessary component in maintaining the skills required to perform the ever-changing duties, to stay current as new imaging drugs and imaging equipment is developed, and to maintain licensure. The incumbent is a registered CNMT or ARRT (N). NOTE: The full performance level of this vacancy is 11. The actual grade at which an applicant may be selected for this vacancy is in the range of 05 to 11. The Professional Standards Board (a peer-review group) will review the selected candidate’s education and experience and recommend the grade and step at which the candidate will be placed. The salary...

Words: 451 - Pages: 2

Premium Essay

Rbi Stress Testing

...Background Globally, banks are increasingly relying on statistical models to measure and manage the financial risks to which they are exposed. These models are gaining credibility because they provide a framework for identifying, analyzing, measuring, communicating and managing these risks. Since models cannot incorporate all possible risk outcomes and are generally not capable of capturing sudden and dramatic changes, banks supplement models with ‘stress tests’. Sensitivity tests are normally used to assess the impact of change in one variable (for example, a high magnitude parallel shift in the yield curve, a significant movement in the foreign exchange rates, a large movement in the equity index etc.) on the bank’s financial position. Scenario tests include simultaneous moves in a number of variables (for example, equity prices, oil prices, foreign exchange rates, interest rates, liquidity etc.) based on a single event experienced in the past (i.e., historical scenario – for example, natural disasters, stock market crash, depletion of a country’s foreign exchange reserves) or a plausible market event that has not yet happened (i.e., hypothetical scenario - for example, collapse of communication systems across the entire region/ country, sudden or prolonged severe economic downturn) and the assessment of their impact on the bank’s financial position. Banks in India are beginning to use statistical models to measure and manage risks. Stress tests are, therefore, relevant...

Words: 1416 - Pages: 6

Free Essay

Finance

...Asset Quality Review and Stress Test: Recent Experiences and Potential Implications for the MENA Region Dubai, 7th May 2014 © Oliver Wyman LON-FSP22401-197 Agenda 1. AQR and stress test: setting a new standard for banking supervision 2. Applying the new methodologies to the prevailing context in MENA region: potential scenarios…. 3. … And implications for MENA Banks 4. Concluding remarks © Oliver Wyman LON-FSP22401-197 1 1 AQR and stress test: setting a new standard for banking supervision Since the start of the Eurozone crisis a number of AQRs and stress tests have been carried out in Europe with relevant impact on the Banks Greece – ’11 Ireland – ‘10 Spain – ‘12 • Economy: ~2% GDP EU • Asset Quality Review • Credit Loss Projections  • Loss Absorption  Capacity • • • •  Capital shortfall ~€24mld Economy: ~12% GDP EU Asset Quality  Review Credit Loss Projections  Loss Absorption Capacity • • • • Economy: ~2% GDP EU Asset Quality Review  Credit Loss Projections  Loss Absorption Capacity Capital shortfall ~€50mld   Capital shortfall ~€60mld Cyprus – ’12 • • Portugal – ’11 • • • • • Economy: ~2% GDP EU Asset Quality Review  Credit Loss Projections  Loss Absorption Capacity Capital shortfall ~€7mld • Economy: ~0.2% GDP EU Asset Quality  Review Credit Loss  Projections Loss Absorption Capacity  Capital shortfall ~€6mld  Slovenia...

Words: 5428 - Pages: 22

Free Essay

Stress Testing

...Introduction Stress tests, in the commercial banking literature, refer to assessing the impact of a rare but plausible shock to the financial system. Stress testing is a simulation technique, which are used to determine the reactions of different financial institutions under a set of exceptional, but plausible assumptions through a series of battery of tests. At institutional level, stress testing techniques provide a way to quantify the impact of changes in a number of risk factors on the assets and liabilities portfolio of the institution. For instance, a portfolio stress test makes a rough estimate of the value of portfolio using a set of exceptional but plausible events in abnormal markets. At institutional level, stress testing techniques provide a way to quantify the impact of changes in a number of risk factors on the assets and liabilities portfolio of the institution. For instance, a portfolio stress test makes a rough estimate of the value of portfolio using a set of exceptional but plausible events in abnormal markets. These tests help in managing risk within a financial institution to ensure optimum allocation of capital across its risk profile. At the system level, stress tests are primarily designed to quantify the impact of possible changes in economic environment on the financial system. The system level stress tests also complement the institutional level stress testing by providing information about the sensitivity of the overall financial system to a number...

Words: 656 - Pages: 3

Premium Essay

Importance of a Finance Manager

...Basel Committee on Banking Supervision Principles for Sound Liquidity Risk Management and Supervision September 2008 Requests for copies of publications, or for additions/changes to the mailing list, should be sent to: Bank for International Settlements Press & Communications CH-4002 Basel, Switzerland E-mail: publications@bis.org Fax: +41 61 280 9100 and +41 61 280 8100 © Bank for International Settlements 2008. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated. ISBN print: 92-9131-767-5 ISBN web: 92-9197-767-5 Table of Contents Introduction ...............................................................................................................................1 Principles for the management and supervision of liquidity risk ...............................................3 Fundamental principle for the management and supervision of liquidity risk ...........................3 Governance of liquidity risk management.................................................................................3 Measurement and management of liquidity risk .......................................................................3 Public disclosure.......................................................................................................................4 The role of supervisors .............................................................................................................4 Fundamental principle for the management...

Words: 19195 - Pages: 77

Free Essay

Stress Test

...The Fed's decision was part of the annual checkup it requires banks with more than $50 billion in assets to undergo to ensure they can endure shocks like those that upended the banking system and led to big government bailouts in the 2008 financial crisis. Lenders announced more than $60 billion of dividends and stock buybacks after the Fed approved capital plans for 25 of the 30 banks in its annual exam. In the extreme scenario, the Fed test assumed a rise in the 6.7% unemployment rate to 11.2%, a 50% drop in stock prices and a decline in home prices to 2001 levels (Citi…). Citigroup shares dropped 5.4% Thursday to close at $47.45 a share after the Federal Reserve rejected the plans of Citigroup and four other banks to raise dividend payments and increase stock buybacks. Twenty-five other banks that took part in the "stress test" received a green light for their planned dividend payouts and share repurchases. Citigroup was the biggest recipient of federal bailout money during the crisis, getting $45 billion in cash infusions and many billions more in guarantees. The Fed said its rejection of Citigroup's plans "reflects significantly heightened supervisory expectations for the largest and most complex" bank holding companies. The results show lenders may still face obstacles to boosting dividends and buybacks even as regulators say the firms have doubled their capital since the first public stress test in 2009 (Citi…Boos). The Fed is increasing scrutiny of the industry’s...

Words: 339 - Pages: 2

Premium Essay

Usefull Citibank Links

...1 http://online.wsj.com/article/BT-CO-20120405-708286.html * April 5, 2012, 10:23 a.m. ET By Alan Zibel Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--A U.S. bank regulator on Thursday cited Citigroup Inc. (C) for failing to comply with a federal law that requires banks to establish protections against money-laundering but didn't impose a fine. The Office of the Comptroller of the Currency said that Citi's U.S. banking unit showed deficiencies in its compliance with the bank-secrecy act, which requires banks to report on suspicious activities and maintain other protections against money laundering. Citi neither admitted nor denied the regulator's allegations and entered into a consent order with the regulator to fix the problems. Though the regulator didn't issue a fine, it still has the right to do so. The regulator said the bank had numerous weaknesses, including problems identifying and monitoring high-risk customers. In response, Citi said that the bank has "taken significant steps" in developing plans to manage the risk of money-laundering risks. "Because of these actions, many of the issues highlighted in the OCC's order have already been remediated or are in the process of being remediated," the bank said. "Furthermore, we are developing a plan to address the remaining OCC requirements. " -By Alan Zibel, Dow Jones Newswires; 202-862-9263; alan.zibel@dowjones.com 2 http://www.fool.com/investing/general/2010/07/22/citigroup-strengths-weaknesses-opportunities-threa...

Words: 6341 - Pages: 26

Premium Essay

The Glass-Steagall Act

...Glass-Steagall Act for Banks and Securities The banking and securities industries has had regulations since the 1930s or earlier. The laws are there to help regulate and give depositors some security. For one reason or another, the law has been changed, updated or appealed. The banking Act of 1933 is known as Glass–Steagall Act named after the Congressional sponsors Senator Carter Glass, a former Treasury secretary, and Senator Henry Steagall (Heakal, Reem). The Glass-Steagall foresaw problems with banks over lending and getting involved in securities. The Federal Deposit Insurance Corporation (FDIC) came out of the Act of 1933 (Stammers, Robert). The Federal Deposit Insurance Corporation (FDIC) wanted banks...

Words: 1640 - Pages: 7

Free Essay

Stress Testing

...importance in the context of the modern business world in order to resolve the problem between these two areas. Therefore, an opportunity is offered by Mahmood Osman Imam sir. Objective of the Report The objective of the report is to evaluate the potential impact on a bank (or a group of entities) of a specific event &/ or movement in a set of financial or macro variable. That’s why we try to find out the following risk: • Credit risk • Interest rate risk • Exchange rate risk • Equity price risk • Liquidity risk Scope of the Report The report may be classified in three broad sections: • Introduction part • Pre-Analysis part • Analysis part Limitations of the Study In preparing the report, some problem is found, affected the presentation of the report. The acute problems are- a) Lack of information or data: Bank is sophisticated business sector. So they are not interested to provide the confidential data. As a result in the report there is a confidential data limitation. Moreover, the bank has no organized product publicity, documents or leaflets for all the products. b) Time constraint: It is something like impossible to cover the entire stress testing procedure exploiting a this time period while an employee or an officer is awarded with one or two year probationary period to do his or her...

Words: 8535 - Pages: 35

Premium Essay

Job Satisfaction

...MARKETING RESEARCH PROJECT REPORT ON THE IMPACT OF GENDER DIFFRENCES ON JOB SATISFACTION, MENTAL HEALTH AND OCCUPATIONAL STRESS AMONG BANKING EMPLOYEES (Submitted In Partial Fulfillment of the course Marketing Research) Submitted To: | Submitted By: | Dr Shalini Trivedi, Assistant Professor, Department of Economics, Amity Business School, Amity University. | Disha Arora B-39Harpreet Kaur B-34Mansi Nigam B-30Payal Saxena B 28Shobhna Swati B-32 | | | Amity Business School, Amity University Declaration I hereby declare that the project work entitled “THE IMPACT OF GENDER DIFFRENCES ON JOB SATISFACTION, MENTAL HEALTH AND OCCUPATIONAL STRESS AMONG BANKING EMPLOYEES” submitted to the Amity University, NOIDA, is a record of an original work done by me under the guidance of Ms. SHALINI TRIVEDI, Assistant Professor, Department of Economics, Amity Business School, Amity University, and this project work is submitted in the partial fulfillment of the requirements for the award of the degree of Master of Business Administration. The results embodied in this thesis have not...

Words: 5991 - Pages: 24

Free Essay

Risk Management

... 1. Introduction The financial sector plays crucial roles that mobilize savings and allocate credit in economic performance. In recent years, there has been significant technological development within the financial sector, which has enable banks to effectively manage their internal risk through the application of risk models. The use of models to measure risks is the preferred approach by most banks, for example Goldman Sachs applies the Value at Risk model. However, according to Office of the Comptroller of the Currency (2011, p1), “the expanding use of models in all aspects of banking reflects the extent to which models can improve business decisions, but models also come with costs”. Besides, in a recent study (Jorion 2009), it is argued that many financial institutions experienced large losses over the past few decades due to limitations of using sophisticated models. Therefore, it is essential for Andrew Bank Ltd. to have an in-depth understanding of disadvantages relating to using models and solutions to improve these model risks. 2. Analysis for problems associated with using models “Risks are uncertainties resulting in adverse variations of profitability or in losses”(Bessis 2002, p11). Banks exposes to following risks, credit risk, interest rate risk, market risk, liquidity risk, operational risk, foreign exchange risk and others. As a result, risk models such as the gap analysis, the Value at Risk (VaR) and pricing model are designed to measure...

Words: 2887 - Pages: 12

Free Essay

Business Management Method

...MASTER OF BUSINESS ADMINISTRATION INTERNATIONAL PROGRAM ((( RESEARCH PROJECT (BMBR5103) FACTORS AFFECTING TO THE JOB STRESS OF EMPLOYEES IN HSBC BANK (Vietnam) Ltd. [pic] Ho Chi Minh City, January 2015 ADVISOR’S ASSESSMENT Advisor’s signature Nguyen The Khai, DBA TABLE OF CONTENTS LIST OF TABLE 3 ABSTRACT 4 CHAPTER I: INTRODUCTION 5 I. INTRODUCTION OF HSBC bank 5 1.1 Over view of the company 5 1.2 Products and brand name 6 1.3 Business Objectives 6 1.4 HSBC bank to commitments to its employees 7 1.5 Human resource manager system 8 II. RESEARCH INTRODUCTION 9 2.1 Problem statement 9 2.2 Main construct 9 2.3 Research objective 9 2.4 Research questions 10 CHARPTER II: LITERATURE REVIEW 11 I. JOB STRESS 11 II. TYPES OF JOB STRESS 13 CHARPTER III: RESEARCH MODEL AND HYPOTHESES 16 I. RESEARCH MODEL 16 II. RESEARCH HYPOTHESES 17 2.1. Work Interference With Family and Family interference with work. 17 2.2 Job –Family Role Strain Scale……………………………………………......19 2.3 Work to family Conflict Scale 21 CHARPTER IV: RESEARCH METHODS 24 I. RESEARCH DESIGN 24 II. RESEARCH METHODS 24 2.1 Data collection method 24 2.2 Measures 24 2.2.1 Work interference With Family and Family interference with work…….25 2.2.2 Job- Family Role Strain...

Words: 12613 - Pages: 51

Premium Essay

Camel Model

...Stenius Banking supervision has been increasingly concerned due to significant loan losses and bank failures from the 1980s till now. In the light of the banking crisis in recent years worldwide, CAMEL is a useful tool to examine the safety and soundness of banks, and help mitigate the potential risks which may lead to bank failures. The research has been conducted as a case study of American International Assurance Vietnam (AIA). It aims to determine whether the CAMEL framework plays a crucial role in banking supervision. Furthermore, the purpose is to identify the benefits as well as drawbacks which the CAMEL system brings to AIA. The research problem was explored by quantitatively analyzing a bank’s overall performance. The paper firstly starts to collect theory relevant to the empirical research, and then draws conclusions from the findings by relating them back to the literature stated in the early stage. Although this study is based on collected data and numerical figures, it is a qualitative study. The findings revealed that CAMEL rating system is a useful supervisory tool in the U.S. CAMEL analysis approach is beneficial as it is an internationally standardized rating and provides flexibility between on-site and off-site examination; hence, it is the main model in assessing banks’ performance in AIA. On the other hand, it has disadvantages of not following the Vietnamese bank closely, ignoring the interaction with bank’s top management and overlooking the provisions as...

Words: 12113 - Pages: 49

Premium Essay

Kapsy77

...financial system stability. My discussion today will be confined to the regulatory framework in India in regard to forex, debt and credit derivative markets and the regulatory imperatives arising in dealing with these instruments and their future development, particularly in the context of global developments. The financial markets, including derivative markets, in India have been through a reform process over the last decade and a half, witnessed in its growth in terms of size, product profile, nature of participants and the development of market infrastructure across all segments - equity markets, debt markets and forex markets. Derivative markets worldwide have witnessed explosive growth in recent past. According to the BIS Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity as of April 2007 was released recently and the OTC derivatives segment, the average daily turnover of interest rate and non-traditional foreign exchange contracts increased by 71 per cent to US $ 2.1 trillion in April 2007 over April 2004, maintaining an annual compound growth of 20 per cent witnessed since 1995. Turnover of foreign exchange options and cross-currency swaps more than doubled to US $ 0.3 trillion per day, thus outpacing the growth in ‘traditional’ instruments such as spot trades, forwards or plain foreign RBI Monthly Bulletin November 2007 * Keynote address delivered by Smt. Shyamala...

Words: 5083 - Pages: 21

Free Essay

Solution

...Edition by Spiro ISBN 007352977X 9780073529776   ISBN-10:007352977X ISBN-13:9780073529776 THIS IS NOT THE ACTUAL BOOK. YOU ARE BUYING the Official Test Bank in e-version INSTANT DOWNLOAD - The test bank is what most professors use as a template when making exams for their students, which means there’s a very high chance that you will see the exact questions in the tests! - The file is either in .doc, .pdf, excel, or zipped in the package and can easily be read on PCs and Macs. - Delivery is INSTANT. You can download the files IMMEDIATELY once payment is done. If you have any questions, please feel free to contact us. Our response is the fastest. All questions will always be answered in 6 hours, most of the time within 30mins. We also faced similar difficulties when we were students, and we understand how you feel. But now, with the Official Test Bank, you will be able to * Anticipate the type of the questions that will appear in your exam. * Know the correct answers to those questions. * Reduce the hassle and stress of your student life. * Improve your studying and get a better grade! * Get prepared for examination questions. * Save you time and help you understand the material. This is the authentic testbank that is designed for your specific textbook. Delivery is made immediately via digital download so there is no waiting. Test Bank is guaranteed accurate....

Words: 262 - Pages: 2