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Exam SCR topic 1 question 64 discussion

Actual exam question from GARP's SCR
Question #: 64
Topic #: 1
[All SCR Questions]

The climate risk team at a global bank works on a sustainability and climate risk report for a forthcoming company strategy meeting. The meeting will focus on bank goals to achieve net zero GHG emissions by 2050. Bank leaders will discuss potential risk exposures the bank may face, as well as possible financial systemic effects.
Which of the following is an example of how systemic climate risk can translate into liquidity risk for the bank?

  • A. High level of deposit withdrawals from households and corporations after a hurricane severely affects a country.
  • B. Sea level rise causes coastal property prices to decrease, which leads to real estate losses for the bank.
  • C. Insurers significantly increase premiums due to climate-related risks and leave the bank without coverage, amplifying risks to financial stability.
  • D. Sector-wide asset stranding for the financial sector increases due to climate pressures, which affects bank revenue and profits as cash flow decreases.
Show Suggested Answer Hide Answer
Suggested Answer: A 🗳️
by Karnitschnig at April 15, 2023, 7:36 a.m.

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Gs2410
1 year, 1 month ago
Selected Answer: A
A is correct answer. I dont know who choses the answers at examtopics.
upvoted 2 times
...
Anil_SUPER_STAR
1 year, 1 month ago
A because Liquidity risk is about losing access to liquidity—the ability to quickly and easily convert assets into cash. Key metrics for liquidity risk include loan-to-deposit ratios (specifically for banks)
upvoted 2 times
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Riskr
1 year, 7 months ago
Selected Answer: A
A is a correct answer on liquidity risk
upvoted 1 times
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Riskr
1 year, 7 months ago
A is the correct answer
upvoted 1 times
...
Karnitschnig
1 year, 7 months ago
Selected Answer: A
A is liquidity, C is underwriting
upvoted 2 times
...

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