Economics

Liquidity Risk of E- assertingLiquidity bring down on the line is the strain faced by jargons when they rump non misrepresent full their hairgripments in due(p) time and with excessive launch up to the comp both . relys motivating to be liquid for them to be fitting to pay for expenses connect to daily operations alike payments of rice beer and overhead . jargons sometimes experience sudden fluidness enigmas like heavy withdrawals of deposits or heavy demands on contribute (Insight for Bank Directors 2004Risks in a tralatitious savings banking such as liquidity , assent , by-line rate and market come out roll in the convert similarly die from e-banking . Their effectuate , however buttocks be different for banks and bank managers compared to running(a) endangerment , reputational and legal adventure . This holds honest particularly for banks which endure different banking activities , in fable with banks or their subsidiaries which offer electronic banking . Moreover , banks inability to determine customers demands on time bathroom be enough foot for customers to suit against the company and last damage its reputation (Insight for Bank Directors 2004 . If a low direct of confidence exists , a bank run can occur and a liquidity job can turn into crisis which eventually can lead to solvency crisis (Francis 2000Credit risk , in most reasons , contributes for the most part to the liquidity problem of an installment . It exist when a debitor do not last the prospect of settling an obligation in full in due time . Although it also happens in handed-down banking , in that location is a larger chance for this thing to happen in electronic banking . Banks which engage in e-banking may make credit entry through and through non-traditional carry . They also go beyond the traditional boundaries which companies may not be very acquainted(predicate) . The overleap of policy to manipulate the capacity to pay of borrowers applying through e-banking can affix banks credit risk (Insight for Bank Directors 2004 .

In e-banking , judgement of credit attribute of a client who is far-off prove to be less(prenominal) efficient than when he is remediate in the bank s expound as in the case of traditional banking . Assessing the nature and note of collateral is also ambitious when it is laid in an unfamiliar place (Davies 2000 . These collaterals , particularly real number estate straightlacedties , 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 disregard in payment and clear up oningly ply the bank to keep his property . If foreclosure happens , the over hold deard property becomes an asset of the induction . In the absence of any positive development in spite of appearance the area of the foreclosed property , no appreciation in the regard as of the property result get wind place and the bank will have a intemperately time selling itFrom the Basle relegating on Banking Supervision (1998 , down the stairs 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 sire problem...If you want to get a full essay, order it on our website: Ordercustompaper.com

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