The bank risks that the banks must prepare for are:
- Borrowers who don't pay the bank back.
- Too many people taking money out of the bank at once.
- Interest rates falling.
What are bank risk?
The bank risk can be defined as the risk suffered by the banks while carrying on its banking operations. The bank risk may arise due to customers, or other market factors.
To avoid the severe effects of the risks, banks must prepare for the risks in advance. The risk of lack of money or bad debts are some of the bank risks.
If many of the customers withdraw their money at once, this will affect the liquidity of the bank. When many lenders do not pay their debts, this too makes money shortage in the bank. Also fall in interest rate is a loss to the bank. These risks should be taken into prior consideration and they should be prepared before hand.
Therefore the correct options are:
- Borrowers who don't pay the bank back.
- Too many people taking money out of the bank at once.
- Interest rates falling.
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