Argumentative essay double spaced font 12
1)The risk facing financial services providers in the UAE – in responding to this question, you need to consider the risk facing financial services providers in general and then consider what specific risks there are in the UAE context that should keep a very sharp focus on.
- Credit Risk
- Concentration Risk
- Counterparty risk
- Behavioral risk
- Business risk
- Market Risk
- Market illiquidity risk
- Valuation Risk
2) Business model risk of financial services providers in the UAE. In the responding to this question, you need to consider the different business models that may be adopted by financial services providers and specifically discuss the busines models of financial services firms in the UAE and the risks that these may present to the UAE financial system.
What is Business Model Risk?
Ø“The current or prospective risk to earnings and capital arising from changes in the business environment and from adverse business decisions , improper implementation of decisions or lack of responsiveness to changes in the business environment”.
Simply put -the risk they won’t make enough money… or highly
vulnerable to excessive losses
Business Model so vulnerable and weak they will not survive
- A complementary analysis to the Business Position analysis by rating agencies
Busines :The comparative analysis for business position comprises all banks with a similar
Position: Industry risk score.A bank is generally compared with all banks in its home country.
How Robust are UAE Banks’ Business Models?
ØLow oil prices for the foreseeable future
ØHeightened credit risks in some GCC countries
ØConcentrated ownership, exposures and funding sources
ØCredit risks and legacy –Covid 19
ØRegulatory and compliance risks (including AML)
ØPoor risk management yes-man culture
ØDigital and Fin-tech competition
ØBasic Competition level and participants
ØSignificantly reduced tourism and travel
ØLow-for-long interest rates and depressed profit margins
ØOverall subdued economic activity and customer defaults
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