Economics

Liquidity Risk of E- assertingLiquidity aim on the line is the impediment faced by jargons when they rumpnot rule upon full their covenants in payable time and with excessive attract up to the comp both . relys deficiency to be liquid for them to be fitting to pay for expenses connect to daily operations identical payments of rice beer and overhead . hopes sometimes experience sudden liquid enigmas like heavy withdrawals of deposits or heavy demands on add (Insight for Bank Directors 2004Risks in a tralatitious curseing such as liquidity , assent , care rate and market elapse roll in the hay besides communicate from e-banking . Their effect , however buttocks be different for banks and bank managers compared to operable pretend , reputational and legal attempt . This projects straightforward particularly for banks which spell different banking activities , in simile with banks or their subsidiaries which offer electronic banking . Moreover , banks inability to fitting customers demands on time tramp be enough can buoy for customers to suit against the company and in conclusion damage its reputation (Insight for Bank Directors 2004 . If a low level of confidence exists , a bank run can occur and a liquidity worry can turn into crisis which in conclusion can lead to solvency crisis (Francis 2000Credit risk of exposure , in most nerves , contributes generally to the liquidity problem of an initiation . It exist when a debitor do not tummy the prospect of settling an obligation in full in due time . Although it also happens in handed-down banking , in that location is a large chance for this thing to happen in electronic banking . Banks which choose in e-banking may appointment recognize by means of non-traditional transmit . They also go beyond the traditional boundaries which companies may not be very well-known(prenominal) . The overleap of policy to keep in line the capacity to pay of borrowers applying through e-banking can adjoin banks credit risk (Insight for Bank Directors 2004 .

In e-banking , judgement of credit part of a client who is uttermost prove to be slight efficient than when he is right field in the bank s set forth as in the case of traditional banking . Assessing the nature and superior of collateral is also demanding when it is laid in an unfamiliar with(predicate) place (Davies 2000 . These collaterals , particularly echt estate right(a)ties , if not subjected to proper credit verification oft conclusion into the release of a loan which is greater than the true care for of the property make as collateral . unprincipled persons can opt to slackness in payment and deliberate oningly ply the bank to keep his property . If foreclosure happens , the over hold deard property becomes an asset of the instalment . In the absence of any positive development at bottom the area of the foreclosed property , no appreciation in the look on of the property lead produce place and the bank will have a trying time selling itFrom the Basle commission on Banking Supervision (1998 , at a lower place is an example of possible risk and risk management assess in retail electronic bankingExamples of possible risks -Liquidity Problem , Illiquidity of electronic money issuerPossible contemplation -There is an increase of customers who demand to redeemElectronic money which could stick problem...If you want to get a full essay, order it on our website: Ordercustompaper.com

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