problem 1:
(a) Do you think that financial development or financial chaos has an impact on economic growth?
(b) Critically assess the contribution of banks in the present worldwide financial crisis?
problem 2:
(a) describe the following terms:
(i) Liquidity Gap;
(ii) Asset-Liability Management;
(iii) Interest rate risk.
(b) Taking the case of Northern Rock or any other bank that have collapsed during recessions worldwide, describe the importance of a good liquidity management for a bank’s sustainable growth.
problem 3:
(a) Define the following terms:
(i) Credit risk drivers;
(ii) Financial covenants;
(iii) Economic capital.
(b) After describeing how Securitization operates, critically consider the costs and benefits of Securitization.