Logged out
Access All our Essays in an Instant
Swap your work for FREE access, or pay £4.99 for instant access
Explain the main risks to which banking activity is subject and outline the steps which banks can take to minimise these risks?
Member rating: No Rating | Words: | Submitted: Fri Feb 06 2004
Page Preview
On the left is an image preview of every page of this document, and below are the first 150 words with formatting removed:
(1) Explain the main risks to which banking activity is subject and outline the steps which banks can take to minimise these risks? There are many types of risk that banks are venerable to but there are three main types. Payment risk, this obviously peculiar to banking and arises from the possibility that the instruction to a bank to make payment, may occur before the funds arise with which to make the payment. Arises specifically from banks role in the payments mechanism. The obvious case is where someone presents a cheque drawn on another bank and asks for immediate payment. It could take up to five working days for the collecting bank to discover that the cheque has been dishonoured, so it pays immediately it risks not receiving payment. This risk is endemic in my system of 'deferred net settlement'. For cheques the solution is for the collecting bank to refuse...
Get instant access
- Instant, unlimited access to our documents in full
- Swap your work for free access, or pay £4.99
- To see the full version of this document and 147,231 others
Receive email updates for this category
- Simply tell us your email address and receive a weekly Study Help Email for FREE
- Receive 3 FREE essay views with each email
- Get all the latest essays from Coursework.Info & discussion from TheStudentRoom.co.uk
