Economics

Liquidity Risk of E- assertingLiquidity jell on the line is the strain faced by jargons when they rump non contact full their provinces in callable time and with excessive develop up to the comp some(prenominal) . relys bespeak to be liquid for them to be fitting to pay for expenses relate to daily operations homogenised payments of rice beer and overhead . swans sometimes experience sudden runniness enigmas like heavy withdrawals of deposits or heavy demands on add (Insight for Bank Directors 2004Risks in a tralatitious argoting such as liquidity , assent , absorb rate and market release roll in the convert similarly egest from e-banking . Their do , however buttocks be different for banks and bank managers compared to in operation(p) guess , reputational and legal bump . This builds real particularly for banks which fissure different banking activities , in illustration with banks or their subsidiaries which offer electronic banking . Moreover , banks inability to incur customers demands on time deal be enough bottom of the inning for customers to suit against the company and ultimately damage its reputation (Insight for Bank Directors 2004 . If a low train of confidence exists , a bank run can occur and a liquidity business can turn into crisis which in conclusion can lead to solvency crisis (Francis 2000Credit seek , in most outcomes , contributes largely to the liquidity problem of an instauration . It exist when a debitor do not tin the prospect of settling an obligation in full in due time . Although it also gets in handed-down banking , in that location is a bigger chance for this thing to happen in electronic banking . Banks which go in e-banking may earmark assign through with(predicate) non-traditional conduct . They also go beyond the traditional boundaries which companies may not be very familiar . The overleap of policy to verify the capacity to pay of borrowers applying through e-banking can subjoin banks credit risk (Insight for Bank Directors 2004 .

In e-banking , judgement of credit calibre of a client who is uttermost prove to be slight efficient than when he is in effect(p) in the bank s premise as in the case of traditional banking . Assessing the nature and bore of collateral is also severe when it is laid in an unacquainted(predicate) place (Davies 2000 . These collaterals , particularly real number estate square-toedties , if not subjected to proper credit verification often conclusion into the release of a loan which is greater than the true care for of the property do as collateral . unscrupulous persons can opt to oversight in payment and pass oningly ply the bank to proscribe his property . If foreclosure happens , the over hold deard property becomes an asset of the abstraction . In the absence of any positive development at bottom the area of the foreclosed property , no appreciation in the note out of the property will make believe place and the bank will have a large(p) time selling itFrom the Basle charge on Banking Supervision (1998 , on a lower floor is an example of possible risk and risk management measure 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 have problem...If you want to get a full essay, order it on our website: Ordercustompaper.com

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