CQIB END OF COURSE EXAM QUESTIONS AND ANSWERS
RATED A+
✔✔What is related entity (Contagion) Risk? - ✔✔The risk that problems arising in other
internal business channels compromise the financial and operational position of the
wider ADI.
✔✔What are the 4 BEAR Measures? - ✔✔1. Executive registration with APRA
2. APRA Power over remuneration policy
3. Remuneration deferral
4. ADIs - APRA will impose civil penalties of up to $200 million on ADIs that do not
appropriately monitor the suitability of their executives to hold senior positions
✔✔What is ACIS responsibility in Risk? - ✔✔ASIC also has an interest in conduct risk;
"The risk of inappropriate unethical or unlawful behaviour on the part of an
organisation's management or employees".
✔✔What is the RAS (Risk Appetite System)? - ✔✔APRA requires that all ADIs maintain
a clear and concise RAS that addresses material risks. The RAS provides direction to
senior management on the type of activity the Board feels is appropriate to engage in,
and what constitutes appropriate limits, or tolerances, for such activities.
✔✔What is the 3 line of defence model? - ✔✔1. Business Operations
2. Risk and Controls Functions
3. Internal Audit
✔✔What are the 8 3100:2009 Risk Management Principles and Guidelines Activities? -
✔✔1. Establish the context
2. Risk assessment
3. Risk identification
4. Risk analysis
5. Risk evaluation
6. Risk treatment
7. Monitoring and review (ongoing)
8. Communication and consultation (ongoing)
✔✔What can you do to help identify Risks? - ✔✔1. Workshop
2. Questionnaires
3. Loss data capture and analysis
4. Near Miss Analysis and experience
✔✔What are the 4 effective key risk indicators? - ✔✔Measurable
Predictable
Comparable
Informational
, ✔✔What are the benefits of Risk Metrics to the business? - ✔✔Metrics help with
monitoring and control of identified risks over time. Tracks a particularly important risk
exposure. Also provides early waring about whether an exposure to risk is changing.
Tolerances or limits are usually tied to risk indicators, which when exceeded alert
management.
✔✔Who are the Key Risk Indicators managed by and why? - ✔✔The risk committee will
escalate risk matters triggered by the Key Risk indicators to the Board. The Board will
specify the indicators to be monitored, and they will decide at which point the Bank is
comfortable to operate.
✔✔What is the Key Information required in the Risk Register? - ✔✔1. Name of the
project/business unit/division
2. Date last reviewed and modified, and by whom
3. Reference numbers assigned to each identified risk
4. Identified risk
5. The probability or likelihood of the risk occurring
6. A rating based on the extent of damage the risk could cause
7. A risk score
8. The control measures identified for handling the risk
9. Whether the risk is within appetite
10. Residual risk rating (after controls have been applied)
✔✔What is ASIC? - ✔✔Australian Securities and Investments Commission
✔✔What is the role of the Bank? - ✔✔• Acts as a financial intermediary between savers
and borrowers, which results in efficient use of pooled resources.
• Contributes to the development of the economy.
✔✔What is the role of the Basel Committee on Banking supervision (BCBS)? -
✔✔International body for corporation on Banking supervisory matters.
It's mandate is to strengthen the regulation supervision and practices of Banks world
wide with purpose of enhancing financial stability.
✔✔What are the Basel Committee on Banking supervisions obligations introduced in
BASEL I 1998? - ✔✔1. Credit Risk
✔✔What are the Basel Committee on Banking supervisions obligations introduced in
BASEL II 2007? - ✔✔Establish a global risk management framework.
Three pillars covering:
1. Credit Risk
2. Operational Risk
3. Market Risk
RATED A+
✔✔What is related entity (Contagion) Risk? - ✔✔The risk that problems arising in other
internal business channels compromise the financial and operational position of the
wider ADI.
✔✔What are the 4 BEAR Measures? - ✔✔1. Executive registration with APRA
2. APRA Power over remuneration policy
3. Remuneration deferral
4. ADIs - APRA will impose civil penalties of up to $200 million on ADIs that do not
appropriately monitor the suitability of their executives to hold senior positions
✔✔What is ACIS responsibility in Risk? - ✔✔ASIC also has an interest in conduct risk;
"The risk of inappropriate unethical or unlawful behaviour on the part of an
organisation's management or employees".
✔✔What is the RAS (Risk Appetite System)? - ✔✔APRA requires that all ADIs maintain
a clear and concise RAS that addresses material risks. The RAS provides direction to
senior management on the type of activity the Board feels is appropriate to engage in,
and what constitutes appropriate limits, or tolerances, for such activities.
✔✔What is the 3 line of defence model? - ✔✔1. Business Operations
2. Risk and Controls Functions
3. Internal Audit
✔✔What are the 8 3100:2009 Risk Management Principles and Guidelines Activities? -
✔✔1. Establish the context
2. Risk assessment
3. Risk identification
4. Risk analysis
5. Risk evaluation
6. Risk treatment
7. Monitoring and review (ongoing)
8. Communication and consultation (ongoing)
✔✔What can you do to help identify Risks? - ✔✔1. Workshop
2. Questionnaires
3. Loss data capture and analysis
4. Near Miss Analysis and experience
✔✔What are the 4 effective key risk indicators? - ✔✔Measurable
Predictable
Comparable
Informational
, ✔✔What are the benefits of Risk Metrics to the business? - ✔✔Metrics help with
monitoring and control of identified risks over time. Tracks a particularly important risk
exposure. Also provides early waring about whether an exposure to risk is changing.
Tolerances or limits are usually tied to risk indicators, which when exceeded alert
management.
✔✔Who are the Key Risk Indicators managed by and why? - ✔✔The risk committee will
escalate risk matters triggered by the Key Risk indicators to the Board. The Board will
specify the indicators to be monitored, and they will decide at which point the Bank is
comfortable to operate.
✔✔What is the Key Information required in the Risk Register? - ✔✔1. Name of the
project/business unit/division
2. Date last reviewed and modified, and by whom
3. Reference numbers assigned to each identified risk
4. Identified risk
5. The probability or likelihood of the risk occurring
6. A rating based on the extent of damage the risk could cause
7. A risk score
8. The control measures identified for handling the risk
9. Whether the risk is within appetite
10. Residual risk rating (after controls have been applied)
✔✔What is ASIC? - ✔✔Australian Securities and Investments Commission
✔✔What is the role of the Bank? - ✔✔• Acts as a financial intermediary between savers
and borrowers, which results in efficient use of pooled resources.
• Contributes to the development of the economy.
✔✔What is the role of the Basel Committee on Banking supervision (BCBS)? -
✔✔International body for corporation on Banking supervisory matters.
It's mandate is to strengthen the regulation supervision and practices of Banks world
wide with purpose of enhancing financial stability.
✔✔What are the Basel Committee on Banking supervisions obligations introduced in
BASEL I 1998? - ✔✔1. Credit Risk
✔✔What are the Basel Committee on Banking supervisions obligations introduced in
BASEL II 2007? - ✔✔Establish a global risk management framework.
Three pillars covering:
1. Credit Risk
2. Operational Risk
3. Market Risk
