Range of Practices Practice Question Set contains 16 pages covering the following learning objectives:
** Within the economic capital implementation framework, describe challenges that appear in:
* Defining and calculating risk measures
* Risk aggregation
* Validation of models
* Dependency modeling in credit risk
* Evaluating counterparty credit risk
* Assessing interest rate risk in the banking book
** Describe the BIS recommendations that supervisors should consider to make effective use of internal risk measures, such as economic capital, not
designed for regulatory purposes.
** Explain benefits and impacts of using an economic capital framework within the following areas:
* Credit portfolio management
* Risk based pricing
* Customer profitability analysis
* Management incentives.
**Describe best practices and assess key concerns for the governance of an economic capital framework.
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