In this article, we’ll explain what credit migration risk and credit metrics are, and how to incorporate them into the financial analysis of companies by lenders and investors. Credit Migration risks: Credit ratings for public companies or Governments are similar to credit scores for individuals. These ratings for the long-term and short-term are provided by…
Interest rate risk is the potential for investment losses that can be prompted by a move upward in the prevailing rates for new debt instruments. Interest rate changes can affect many investments, but it impacts the value of bonds and other fixed-income securities most directly. As interest rates rise bond prices fall, and vice versa.…
RBI on Monday July 21, 2025 through notification announced that “it has been decided to permit banks to reckon Government securities as Level 1 HQLA* under FALLCR** within the mandatory SLR requirement up to 16 percent of their NDTL, under Basel III Framework on Liquidity Standards. Consequently, the total HQLA carve-out from the mandatory SLR,…
The Reserve Bank of India has today (June 26, 2023) issued the Master Direction on Minimum Capital Requirements for Operational Risk. The Central Bank said that the circular is issued after appropriately considering the feedback received from stakeholders. According to the Directions require all specified Commercial Banks (excluding Local Area Banks, Payments Banks, Regional Rural…
The business of banking is confronted with multiple numbers of risks viz. credit risk, liquidity risk, operational risk, reputation risk, legal risk, market risk, strategic risk, country risk, counter-party risk, contractual risk, Access risk, systemic risk, and so on. Nevertheless, like in any other business risk-taking in banking is also inevitable as it also presents…
