Md Monirul Islam
What is Risk? Risk refers to uncertainties that lead to adverse outcomes. These outcomes deviate from planned objectives or expectations. Financial risk is the uncertainty that results in adverse variation of profitability or outright losses. Profits depend on cash inflows…
Md Monirul Islam
When interest rates change, the market value of a bank’s assets and liabilities changes too — but not always by the same amount. Duration Gap Analysis helps measure this difference and understand the risk it creates for the bank’s net…
Md Monirul Islam
Bangladesh Bank guidelines require banks to conduct stress tests on five specific risk areas, plus a combined shock assessment that aggregates all of them together. Credit Risk: Five shocking events are tested: (i) Direct increase in NPLs: 3%, 9%, and…
Md Monirul Islam
Stress testing is a simulation technique used to determine the reactions of different financial institutions under a set of exceptional, but plausible assumptions, through a series of tests. At the institutional level, stress testing provides a way to quantify the…
Md Monirul Islam
Implementing ERM is not something you do once and forget. It is an ongoing process. The 10 steps are grouped into 4 phases. Each phase builds on the previous one. Phase 1: Planning and Designing Step 1 — Identify Intended…
Md Monirul Islam
The COSO ERM framework is structured around 8 components. These components apply across all four business objectives and at every level of the organization. Internal Environment: This is the foundation. It establishes the entity’s risk culture — the risk management…