The bank’s various lines of business produced the following gross income:

Retail banking $40,000 Commercial banking 50,000 Payment and settlement 15,000 Trading and sales 5,000 Asset management 10,000 What is the add-on to capital for operational risk? Does the bank have sufficient capital to cover this add-on and remain adequately capitalized, while meeting the capital conservation buffer?

1 . How does product segmentation reduce the profitability and risk of FIs? How does it increase the profitability and risk of FIs?