Discuss the extent to which the CAMELS framework is used to assess commercial banks and their performance.

$25$

Risks are uncertainties resulting in adverse variations of profitability or in losses.

Discuss the various risks that banks are exposed to and how these are mitigated.

$25$

Briefly discuss on any two of the following banking crisis

$($a$)$ UK $-$ Banking Crisis $(1990\text{'}$s$)$

$($b$)$ US $-$ Failure of Continental Illinois $(1994)$

$($c$)$ Germany $-$ Failure of Bank Herstat $(1974)$

$($d$)$ US $-$ Subprime Mortgage Crisis

$25$

Two prudential controls that the Central Bank exercise on commercial banks are, Entry Policy and Good Governance coupled with risk management strategies.

Discuss how these controls help to establish financial stability and soundness in the financial system.

$[$Total: $25$ Marks$]$