Question: Question 2 Your CRO day is only started. The CEO is now seeking your inputs on the macro-environment of the bank and the current solidity

Question 2 Your CRO day is only started. The CEO is now seeking your inputs on the macro-environment of the bank and the current solidity of the financial system. (a) Determine whether the banking system is now safer than before the 2007-2009 Global Financial Crisis from a capital standpoint. (5 marks) (b) Illustrate the two (2) major components of liquidity risk and appraise the current solidity of the banking system in terms of liquidity. (10 marks) (c) Discuss what is meant by systemic risk and the buffering mechanism of SIFI. (10 marks)

d) Illustrate two (2) major implications of climate change for risk management in banking. (5 marks)

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