7-86 Risk management for financial intermediaries deals with

Question

Quizplus · Accepted Answer

Risk management for financial intermediaries involves limiting the mismatches on the institution's balance sheet, such as managing the maturity or liquidity mismatches between assets and liabilities. This helps to reduce the potential losses that can arise due to fluctuations in interest rates, credit risk, or market movements. Controlling the overall size, scope of activities, and geographic spread can also be part of risk management, but limiting mismatches is a more specific and relevant factor for financial intermediaries. Compliance with regulations is important, but not necessarily the primary focus of risk management.

7-86 Risk Management for Financial Intermediaries Deals with