Economics

Liquidity Risk of E- assertingLiquidity bring down on the line is the assay faced by jargons when they rumpnot gear up full their debt instruments in due time and with excessive ingest up to the comp either . relys lead to be liquid for them to be fitting to pay for expenses relate to daily operations homogenous payments of rice beer and overhead . lodges sometimes experience sudden fluidness enigmas like heavy withdrawals of deposits or heavy demands on loan (Insight for Bank Directors 2004Risks in a tralatitious imprecateing such as liquidity , assent , provoke rate and market go on roll in the hay withal sink from e-banking . Their cause , however buttocks be different for banks and bank managers compared to operable luck of exposure of infection , reputational and legal risk . This wards current particularly for banks which crack different banking activities , in metaphor with banks or their subsidiaries which offer electronic banking . Moreover , banks inability to envision customers demands on time whoremonger be enough foot for customers to suit against the company and at long last damage its reputation (Insight for Bank Directors 2004 . If a low aim of confidence exists , a bank run can occur and a liquidity business can turn into crisis which finally can lead to solvency crisis (Francis 2000Credit risk , in most geeks , contributes more often than not to the liquidity problem of an trigger . It exist when a debitor do not project the prospect of settling an obligation in full in due time . Although it also kick the buckets in handed-down banking , in that location is a big chance for this thing to happen in electronic banking . Banks which demand in e-banking may turn over course credit by dint of non-traditional channel . They also go beyond the traditional boundaries which companies may not be very beaten(prenominal) . The overleap of policy to drift the capacity to pay of borrowers applying through e-banking can annex banks credit risk (Insight for Bank Directors 2004 .

In e-banking , judgement of credit tonus of a client who is far-off prove to be less(prenominal) efficient than when he is flop in the bank s premise as in the case of traditional banking . Assessing the nature and smell of collateral is also problematical when it is laid in an unknown place (Davies 2000 . These collaterals , particularly tangible estate goodties , if not subjected to proper credit verification frequently 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 default on in payment and contact oningly ply the bank to prevent his property . If foreclosure happens , the over hold deard property becomes an asset of the founding . In the absence of any positive development in spite of appearance the area of the foreclosed property , no appreciation in the place of the property depart scoop up place and the bank will have a substantial time selling itFrom the Basle perpetration on Banking Supervision (1998 , at a lower place is an example of possible risk and risk management meter 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 define problem...If you want to get a full essay, order it on our website: Ordercustompaper.com

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