Question 1:
i) Discuss the main risks facing a retail bank in its traditional business of deposit taking and lending?
ii) How can a bank manage the risks related to credit and liquidity.
Question 2:
i) Explain fully, using illustrative examples, the importance of capital adequacy in the context of banking.
ii) Critically discuss the role of the international accord on capital adequacy (The Basle Committee Accord) in the management of solvency risk.