Regulatory Frameworks
Are international regulatory frameworks developed by the BCBS. They focus on capital adequacy, stress testing, and risk management to enhance the stability of the global banking system.
Basel Accords
_______ aim to improve the efficiency, stability, and fairness of the financial system.
Financial Reforms
_______is a broad term applied to activities involving updating banking and online accounts over a computer network or automated system.
Electronic Banking
_______ in the Philippines are subject to the same AML regulations as traditional banks.
Digital Banks
What is the term for the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling?
Inflation
An intergovernmental organization that designs and promotes policies and standards to combat money laundering and terrorist financing.
Financial Action Task Force (FATF)
Introduced in 2014, this allows banks to park excess reserves at the BSP at a higher interest rate than usual. This aims to manage liquidity and prevent excessive credit growth, helping maintain financial stability.
Special Deposit Facility (SDF)
A type of risk which arises from the potential for loss due to significant deficiencies in system reliability or integrity.
Operational Risk
It is one of the key circulars which outlines the guidelines for AML and Countering the Financing of Terrorism (CFT) for digital banks in the Philippines.
Circular No. 1108
What term describes the reduction in the value of an asset with the passage of time, due in particular to wear and tear?
Depreciation
What are the 3 Pillars of Basel III?
Pillar 1: Enhanced Minimum Capital and Liquidity Requirements
Pillar 2: Enhanced Supervisory Review Process for Film-wide Risk Management & Capital Planning
Pillar 3: Enhanced Risk Disclosure Market Discipline
This unconventional monetary policy involved central banks purchasing large amounts of government bonds to inject liquidity into the economy during the 2008 financial crisis.
Quantitative Easing
The risk for the bank to experience significant negative public opinion that may result in "losing popularity" with existing and potential customers.
Reputational Risk
_____ enables authorities to investigate money laundering and other financial crimes, protecting financial institutions and deterring criminals from using the Philippines as a money laundering destination.
Anti-Money Laundering Act (AMLA) of 2001, or RA 9160
Identify the type of financial instrument that represents ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
Stock
What are the three Legal Instruments to prevent the use of the financial system for illicit activities?
L1: Anti-Money Laundering Strategies
L2: Anti-Money Laundering Enforcement
L3: Extradition & Unlawful Asset Recovery
Raising interest rates makes borrowing more _______, which can help slow down _______. In periods of rapid economic growth, higher rates can prevent the economy from overheating by curbing excessive _______ and _______.
expensive; inflation; spending and borrowing
What are the violations that will lead the arises of the legal risk?
i. non-conformance with laws
ii. non-conformance with rules and regulations
iii. Not well established legal rights and obligations
It is the practice of protecting sensitive information and systems in the banking sector from unauthorized access, disclosure, disruption, modification, or destruction.
Cybersecurity
This term describes the financial strategy of borrowing money to increase the potential return of an investment. What is it called?
Leverage
In the context of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF), enumerate the components of:
1. Asset Protection
2. Disclosure Policies
3. Effectiveness Evaluation
Asset Protection: SCC (Securing Core Capital); SSC (Securing Supplementary Capital); SL (Securing Liquidity)
Disclosure Policies: DETP - Detection Procedures; IEDP (Internal & External Disclosure Policies); Know Your Employee (KYE) Policies
Effectiveness Evaluation: ORA (Operational Risk Assessment); DPA (Disclosure Policy Assessment)
Provide 5 famous Global Regulatory Changes in Finance.
1. Glass-Steagall Act (USA, 1933)
2. Sarbanes-Oxley Act (USA, 2002)
3. Basel Accords (Global, 1988-present)
4. Dodd-Frank Wall Street Reform and Consumer Protection Act (USA, 2010):
5. China's Capital Account Liberalization (ongoing)
6. European Union's General Data Protection Regulation (GDPR, 2018)
7. India's Aadhaar Scheme (2009)
8. Global Anti-Money Laundering (AML) Regulations
9. Crypto-asset Regulations (emerging)
10. Sustainable Finance Regulations (emerging)
Fraud risk in electronic banking includes _______, _______, and_______.
identity theft, phishing scams, and unauthorized transactions
Identify each of the following:
i. Tricking victims into giving personal informations
ii. A cyber threat that encrypts important data and prevents owners from accessing it until they pay a high cost or ransom.
iii. Deceptive programs that appear to perform one function, but in fact perform another, malicious function.
iv. The act of disguising a communication from an unknown source as being from a known, trusted source.
v. Exposing customers financial informations
i. Phishing
ii. Ransomware
iii. Trojans
iv. Spoofing
v. Data Breach
What is the name of the financial instrument that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date?
Option