Perceptions of Bankers and Researchers

Question: Discuss about the Perceptions of Bankers and Researchers. Answer: Introduction According to the Bank for the International Settlements, the ANZ bank has been suffering from the credit risk, which is difficult to meet the obligations of the borrowers in accordance to the agreed terms. As opined by Chakraborty Sen (2016), credit risk is caused due to the loans, trade financing, interbank transactions, foreign exchange transactions etc. This study is helpful to identify the international risks, which are suffering by the ANZ bank and how these risks would be mitigated would also be highlighted. It can be observed that the return on equity of ANZ bank of Australia has been decreased by 0.4 per cent. In addition, net interest would also decrease by 2.03 per cent since March 2008. As per the statement of Tonzer (2015), due to lower rate of interest, government of the country would intent on the reversing deficits. As a result, the resource sector and the shaky employment growth would push the debts in a different approach. In order to mitigate this risk, the regulators are willing to increase the volume of capital, which are needed to hold on mortgages. On the other hand, it can be also suggested that the regulators also require to put a break on the investor loan growth. This refers that the revenue development is going to be difficult to come by. Oet et al., (2013) opined that the borrowers would be able to maintain the repayment amounts as the rate of interest decrease, it would cut the loan growth. On the other hand, the ANZ bank would be able to earn interests. In addition, it can be seen that the ratio of cost to income would flat in the half of the year. In this context, it can be stated that the shareholders of the bank would require to continue to spend on the technology in order to new consumers and also defend against the digital upstarts at the level of higher profitability. On the contrary, Van Greuning Bratanovic (2016) argued that the pay off would come later. Furthermore, it can be mentioned that as capital is increasing and reducing the bank leverage on mortgages, therefore the amount of profitability and the capacity to distribute to the consumers would be at lower rate of interest. In addition, it can be also stated that the dividends of the shareholders would also decrease. In order to mitigate the risks, the risk management department of ANZ bank would require to monitor, control and also measure the mentioned risks. On the other hand, the risk management department helps to the bank authority by estimating the present portfolio risks of assets, loans, liabilities or the exposures. Conclusion After the analysis, it can be observed that the ANZ bank of Australia has been suffering from credit risk and operational risk. After identify the risks, this study is benefitted to discuss how the risks would be reduced with the help of risk management authority of ANZ bank. References Chakraborty, T., Sen, S. (2016). Perceptions of Bankers and Researchers Towards Effectiveness of Basel Norms in Banking Risk Management: A Survey. Oet, M. V., Bianco, T., Gramlich, D., Ong, S. J. (2013). SAFE: An early warning system for systemic banking risk.Journal of Banking Finance,37(11), 4510-4533 Tonzer, L. (2015). Cross-border interbank networks, banking risk and contagion.Journal of Financial Stability,18, 19-32. Van Greuning, H., Bratanovic, S. B. (2016).Analyzing and managing banking risk-a framework for assessing corporate governance and financial risk.