subject:financial markets and institutions

Question 5 Malaysia's Banking Outlook To Weaken, But Risks To Financial Stability Remain Modest BMI / Banking \\& Financial Services / Malaysia / Mon 16 Jan 2023 We expect Malaysia's banking system to remain stable over the coming quarters as the banking sector boasts robust capital and liquidity buffers. However, we believe that the outlook for banks will likely deteriorate in 2023, amid a higher interest rate and slower growth environment. Non-performing loans will likely increase over the coming months, while we forecast credit growth to slow to \4.3 in 2023 , from a revised estimate of \5.2 in 2022 . In this changing business environment financial risk Management will become more important in particular in terms of Environmental, Social and Corporate Governance (ESG). a) List and discuss the FIVE (5) main important risks in Financial Institutions and illustrate how these risks can be mitigated. 5 marks) b) Describe TWO (2) components to measure a bank's liquidity exposure. 4 marks)