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Banking Operations Management Flashcards

7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Banking Operations Management flashcards as text

  1. Which regulatory framework requires U.S. banks to maintain a minimum Liquidity Coverage Ratio (LCR) to withstand a 30-day stress scenario?

    Answer: Basel III Accord

    Basel III introduced the LCR requirement, mandating banks hold sufficient high-quality liquid assets to cover net cash outflows over a 30-day stress period.

  2. A bank's net interest margin (NIM) is calculated as:

    Answer: Net interest income divided by average earning assets

    NIM equals net interest income divided by average earning assets, measuring how effectively a bank generates income from its interest-bearing assets.

  3. Under the Bank Secrecy Act (BSA), a Currency Transaction Report (CTR) must be filed for cash transactions exceeding:

    Answer: $10,000

    The BSA requires banks to file a CTR with FinCEN for any cash transaction — or series of related transactions — exceeding $10,000 in a single business day.

  4. Which operational risk event type, as defined by Basel II, involves unauthorized access to bank systems resulting in fraudulent fund transfers?

    Answer: External fraud

    External fraud covers losses from acts by third parties such as unauthorized system access, theft, and forgery.

  5. In banking operations, 'float' refers to:

    Answer: Funds in transit between the deposit and collection of a check

    Float represents money that is simultaneously counted in two accounts during the check-clearing process, reflecting the delay between deposit and final settlement.

  6. A bank implements a 'dual control' policy for vault access primarily to:

    Answer: Prevent internal fraud and ensure accountability

    Dual control requires two authorized employees to be present simultaneously, deterring internal theft and creating an audit trail for vault transactions.

  7. Which metric best measures the efficiency of a bank's operational cost structure relative to its revenue?

    Answer: Efficiency ratio

    The efficiency ratio (non-interest expense divided by net revenue) shows what percentage of revenue is consumed by operating costs — lower is better.