Reference no: EM132847171

i. Set out an introduction clearly outlining what it is you are looking at, why you are looking at it, and how you intend to set about looking at it.

ii. Discuss the various risks faced by banks and critically evaluate the way these risks are managed within a bank so that the risks associated with them are minimised.

iii. Discuss the current regulatory system and evaluate whether the current regulatory system restricts profitability within a bank.

iv. Draw a conclusion based on the evidence that you have produced. Ensure that your conclusions are justified through the evidence you have provided.

v. Ensure that all of the points above that you include together with any others, are set within a piece of writing which is integrated and coherent and ‘flows'. Do not put forward a set of standalone paragraphs which, if the essay were a book might be wonderful individual chapters, but as a book do not flow into and out of each other, generating a reading experience which is likely for the reader to be unsatisfactory, probably unconvincing, and certainly a deflating experience - and leading to a lower mark.

Banking by its very nature is a risky business. For example, every time a bank makes a loan it is open to credit risk. Banks take on such potential risk as they earn revenue, both interest income and non-interest income from lending activities. Banks also face other risks in their day-to-day operations. Unforeseen demand for cash / money may bring about liquidity issues / risk. However, banking regulation is designed to prevent banks from taking excessive risk as they would need to support the risk within their asset portfolio, and day to day activities, with adequate capital which is expensive to raise and hold. Some analysts believe that the current regulatory regime prevents banks from operating in a manner which will maximise their profits but other believe that bank profits have not been adversely affected by regulatory changes.

Question: Examine the various risks bank face and evaluate the ways in which these risks can be reduced. In addition, review the current regulatory system and consider whether the restrictions put on banks adversely affects their performance or profitability.

Attachment:- chapters.rar