CMA Final · Risk Management in Banking and Insurance · Operational Risk and Off-Balance Sheet Risk
Under the Basel framework, which of the following is classified as an event-type category of operational risk loss?
Execution, delivery and process management is one of the seven Basel operational risk event types. The others listed are interest rate risk in the banking book, credit migration and concentration of exposures, which belong to market or credit risk rather than operational risk loss events.
- AExecution, delivery and process managementCorrect
- BInterest rate risk in the banking book
- CCounterparty credit migration
- DConcentration of large exposures
Explanation
Basel lists seven operational loss event types, including internal fraud, external fraud, employment practices and workplace safety, clients products and business practices, damage to physical assets, business disruption and system failures, and execution, delivery and process management. The other options are credit, interest rate or concentration risks, which are not operational loss event types.
Did you get it right without looking?
One question tells you little. A timed set on Operational Risk and Off-Balance Sheet Risk shows your real accuracy, how long you take and where you lose marks.
More Operational Risk and Off-Balance Sheet Risk questions
- Case: A bank has a forward contract with a customer to buy USD 1,00,000 at Rs 84 per USD. The current replacement cost (mark-to-market) is R…
- Which of the following is an off-balance sheet exposure of a bank?
- Under the Basel framework, which of the following is a correct example of an operational risk event category?
- Which statement best describes why a bank's letter of credit and guarantee commitments are called off-balance sheet risk?
- A bank has a notional interest rate swap of Rs 200 crore with a corporate. Under the current exposure method, add-on is 1% of notional and t…
- Which statement best describes the Loss Distribution Approach to measuring operational risk capital?