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Give a detailed report on control mechanisms for internally & externally inflicted operational losses [12]

2. Using four examples explain the process of operational loss occurance [12]

3. Explain why goodwill and investments in unconsolidated subsidiaries should be deducted from tier 1 capital [4]

4. Suppose you bought a N$ 1.65 billion corporate bond, N$ 1.2 billion worth of treasury bills, N$ 103 million worth of mortgate loans. Calculate the minimum regulatory capital for your portfolio [6]

5. Suppose you have a portfolio with three claims each of notional value of N$ 10 million. The first is with treasury, the second is with a multilateral development bank, third with a bank outside the OECD region, what is your total risk weighted sum of assets? [6]

6. Suppose a bank issued a two-year revolving credit of N$2.5 billion to another OECD bank, and suppose at the moment a total N$1.243 bilion is still uncommitted. Suppose further the that, the ank has another claim of N$ 2.1 billion on a multilateral development bank. What minimum regulatory capital should the issuing bank hold against this portfolio? [10]

7. Suppose a bank has concluded a five-year currency swap with another OECD bank, on a notional amount of N$ 2,000,000, whose current market value is N$250, 000, 000. Suppose further it has forward contract in Gold which has notional value of N$ 3.2 billion. What is the risk weighted sum of this portfolio? [10] 8. Suppose the gross income for the past five years of particular Bank are as follow (millions of N$): Corporate finance:(2,4, 2,5,6), Trading and Sales (22,14, 43,24,64), Retail Banking (12,14, 43,34,24), Commercial Banking (12,14, 23,24,54), Payment and settlement (12,14, 43,54,64), Agency services (33,14, 33,34,34), Asset Management (14,14, 13,14,24), Brokerage services (12,14, 43,54,64). Calculate its regulatory capital for operational risk for the current financial. [20]

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