Financial Risk Manager Part 1
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Kevin Stanley, a senior risk consultant at Wansley Consultation Company, is currently providing risk consultation to the RUSSBANK's recently opened retail operations in Ukraine. RUSSBANK is one the largest Russian banks that has recently started retail operations in the Ukrainian market. Ukraine has a history of a large number of bank failures due to very low recovery rates. Since RUSSBANK has entered the Ukrainian market for the first time and it is not familiar with the retail market yet, Kevin referred the bank management and board to the
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TTanishq
A
Basel II framework
B
Basel III framework
C
Basel I framework
D
Basel IV framework
E
None of the above
F
All of the above
Explanation:
Based on the context provided in the question, Kevin Stanley is referring RUSSBANK's management and board to the Basel II framework. The Basel II framework specifically addresses operational risk and credit risk management, which is highly relevant given that RUSSBANK is entering a new market (Ukraine) with a history of bank failures and low recovery rates. Basel II introduced more sophisticated risk measurement approaches including:
- Three Pillars: Minimum capital requirements, supervisory review, and market discipline
- Advanced approaches for credit risk (Internal Ratings-Based approaches)
- Operational risk frameworks
- Enhanced risk sensitivity compared to Basel I
This framework would help RUSSBANK establish proper risk management practices in an unfamiliar market environment with significant credit risk challenges.
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