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Chapter Six discusses risk management in financial institutions, focusing on credit risk and interest-rate risk. It highlights the challenges of adverse selection and moral hazard in loan markets, and outlines principles for managing credit risk such as screening, long-term relationships, loan commitments, and collateral. Additionally, it addresses various risks faced by financial institutions including credit, liquidity, interest rate, market, off-balance sheet, foreign exchange, country, and insolvency ri

Author
gweleabyezgi
Language
EN