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Questions and Answers
Who holds the tertiary responsibility for ensuring that the bank has adequate capital to support its risks?
Who holds the tertiary responsibility for ensuring that the bank has adequate capital to support its risks?
- Regulators
- Board of Directors (correct)
- Shareholders
- Bank management
What is the key principle of the supervisory review process (SRP) mentioned in the text?
What is the key principle of the supervisory review process (SRP) mentioned in the text?
- Ensuring banks have a process for assessing overall capital adequacy in relation to their risk profile (correct)
- Promoting banks to engage in speculative trading
- Encouraging banks to increase their profit margins
- Requiring banks to invest in high-risk ventures
What is the purpose of the Supervisory Review Process (SRP) according to the text?
What is the purpose of the Supervisory Review Process (SRP) according to the text?
- To maximize banks' short-term profits
- To encourage banks to take on excessive risk
- To minimize banks' regulatory compliance efforts
- To ensure banks have adequate capital to support all the risks in their business (correct)
What does the Supervisory Review Process (SRP) encourage banks to develop and use?
What does the Supervisory Review Process (SRP) encourage banks to develop and use?
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What is the primary responsibility of bank management according to the text?
What is the primary responsibility of bank management according to the text?
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