(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?
(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.
(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.