Question 1:
Illustrate the Component and Composite Rating system which the Banking Supervisor makes employ to supervise banking institutions.
Question 2:
“Outsourcing of activities by domestic banks is permissible under the provisions of Bank of Mauritius Guideline on Outsourcing by Financial Institutions’’. Explain with the aid of examples.
Question 3:
(a) Write concise notes on the following:
(i) International Organisation of Securities Commission (IOSCO).
(ii) International Association of Insurance Supervisors (IAIS).
(iii) The Joint Forum of Financial Conglomerates.
(b) IAIS has issued a set of nine (9) particular principles to Insurance Companies which they are required to adhere to in the best interests of the customers and the integrity of Insurance Market. Outline any five of these principles.
Question 4:
In course of their operations, financial institutions are exposed to numerous risks which if not properly managed or controlled, can be harmful to them.
Explain the following key risks comprising the respective risk management techniques that are used by the financial institutions to mitigate them:
(a) Credit Risk
(b) Interest Rate Risk
(c) Market Risk
(d) Liquidity Risk
(e) Operational Risk
Question 5:
(a) What are the objectives of 25 Core Principles for effective banking supervision issued by Basel Committee on Banking Supervision (BCBS)?
(b) Enumerate any twelve of these principles.
(c) For the core principles to be effective, BCBS thinks that some pre-conditions are vital to accomplish effective banking supervision worldwide. Describe these pre-conditions.