In assessing risks, regulatory compliance and profit opportunities, asset and liability management (ALM) obviously needs to look at financial statements, both of the bank and occasionally of the major borrowers and organisations whose shares and bonds the bank owns. However, financial statements for banks present a different analytical problem than statements for manufacturing and service companies. As a result, analysis of a bank's financial statements requires a distinct approach that recognizes a bank's unique risks. Required: A. From an ALM perspective, what can a banks balance sheet tell you in terms of the banks inherent risks? You must mention and discuss any two key balance sheet risks which can have a serious impact on a banks solvency? [8 MARKS] B. How can the amounts reported on a banks income statement tell you in terms of the banks risk management decisions? [8 MARKS] C. What is the importance of assessing the earnings quality of a bank? In doing the assessment, what are the major things you would be looking for? [4 MARKS