Reference no: EM131658068

Take the following 8 points into accounts while doing the answering :-

1) Financial risk management and the Basel Accords ,

2) Required rates of return post-financial crisis ,

3) Systemic risk ,

4)The liquidity crisis and its impact on the banking industry ,

5)Financial regulation and an overview of the Basel accords ,

6) The investment environment, risk, and return

7) The financial system and the Global Financial Crisis

8) Valuing bonds in the post-Global Financial Crisis

QUESTION :-

Context

There are a number of areas relating to risk and risk management and ways to look at the operational aspects of financial institutions and both are set against a background of minimising risk through regulation. There is a potential conflict between these two areas. Regulation is aimed at reducing systemic risk but financial institutions, especially banks, take risks every time they lend money. Since the recent global financial crisis, banks in many countries have been criticised for not lending enough to small and medium sized businesses, especially in times of recession when they need funds the most, as regulators and regulations force the banks to focus on quality within their lending operations. This is referred to as the counter cyclical argument.

Banks are effectively firms and their primary objective is maximising shareholder wealth through profit maximisation. However, regulators impose strict operating restrictions on banks as their objective is to control the bank's liquidity and solvency in an attempt to minimise systemic risk especially in the post crisis era.

Requirement:

Critically review how the tensions between these two objectives can be resolved showing how banks can attempt to maximise their profits whilst operating under these regulatory constraints. Take into account the 8 points mentioned in the beginning of the page. Also please make use of the information mentioned in "

"Global Financial Systems 1st edition Jon Danielsson

Originalmaterials from Global Financial Systems copyright 2013 Pearson.''

Your conclusions should be based on evidence you have reviewed and you may draw upon relevant theories and ideas and where appropriate use analysis, arguments and justification by using examples and illustrations.

In answering this question, you should not only refer to material you have in Themes 3 and 4 in the study materials but you should also look at additional journal articles, trade association publications, and annual reports, showing us that you can conduct relevant and independent research. An in-depth knowledge of Basle 3 is not expected but you might want to refer to it in your answer.

Key descriptors:

Critical evaluation - here you must provide your verdict on the issues and draw conclusions as to what extent a statement or findings within a piece of research are true, or to what extent you agree with them. You must provide evidence from a number of sources which both agree and disagree with the argument presented. You are also required to produce a final conclusion based on your decision on what you think to be the important factors and then justifying how you have made your choice.

Review - this involves you thoroughly looking into a subject. There should be a critical assessment and not just a descriptive review.

Analyse - break an issue into constituent parts and fully discuss these parts.

No appendices (other than the list of references) are allowed.

- Figures, diagrams, tables will count as part of your word count

- At the end of your response you should state your word count, excluding your list of references.

The maximum word limit for this coursework assignment is 4,000 words (excluding the list of references).