- 20 Marks
CG – APR 2024 – L4 – Q2 – Corporate Governance Issues in Asset-Liability Duration Mismatch
Critically examine corporate governance issues raised by asset duration being double that of liabilities amid rising inflation and interest rates in a bank.
Question
In Aqualand, the level of Inflation and Interest Rates continue to increase. The members of the Board of Aqualand Bank, Limited in their recent review of the bank’s Strategic Plan submitted by the Executive Team have concluded that the duration of the bank’s Assets is almost twice or double that of the Liabilities. Critically examine the main Corporate Governance issues the members of the Board should credibly raise with the Executive Team of the bank.
(20 marks)
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