Consider the following statement of financial position balance sheet for Summit Bank $($in R millions$)$:

Additional information:

Floating$-$rate home loans are repriced every six months

The market yields on assets and liabilities are indicated in parentheses $().$

Calculate the expected net interest income at year$-$end. $(6$ marks$)$

Calculate the effect on net interest income at year$-$end if interest rates increase by $200$ basis points on assets and by $150$ basis points on liabilities.

Discuss the effect on the bank's net interest income $($NII$).(8$ marks$)$The global financial system has become increasingly interconnected, fostering efficiency and innovation. However, this very integration amplifies systemic

risks, as evidenced by past financial crises.

Required:

Explain the key stages of the risk management process in banks. Analyze two case studies of bank failures that can be attributed, at least partially, to

inadequate risk management practices. Examine how risk management practices in banks need to adapt in response to the challenges and opportunities

presented by a more integrated financial system.