The current situation is not any different. The current financial crisis which started in Wall Street five years ago has not abated since then. Many economic indicators point to the fact that we are once again on the edge of financial disaster. Many economic models predict a recession within the next three years. There is no denying the reality of the matter but risk management in financial institutions is still very much alive.
To understand how risk management works, we have to go back to the beginning of the financial crisis. The subprime loan fiasco started when loans were issued in amounts that exceeded the financial capacity of homeowners. Homeowners soon found out that they could not pay off these loans and they soon lost their homes. This in turn resulted in a chain reaction. Other consumers who could not qualify for the subprime loans began to ask for personal loans from other financial institutions. The result was financial institutions receiving lots of new debt while having to repurchase financial instruments that are insured by the government.
Many of these financial institutions had to take a loan with higher interest rates and larger penalties. Since it was impossible for these institutions to return all the money that they issued for poor risk management they received government bailout. As a result the number of bankruptcies increased dramatically and this created even more pressure for risk management in financial institutions. If these institutions did not properly manage the risks of their assets, the government would step in and provide them with financial assistance. Unfortunately, many people did not think that their lives would end up in the hands of the government and so they chose to take out loans and other debt with financial institutions that did not properly assess their risk management needs.
As the risk management crisis worsened, the number of cases filed against financial institutions also grew. Many times, this was not necessarily as a result of direct risk but because of indirect risk. A bank that sold its mortgage servicing to a company that did not properly assess the risks involved would also be guilty of something. Thus, this kind of risk management in financial institutions take my exam for me is essential to ensure that you don’t become a statistic.
The United States passed the RESPA laws which required financial institutions to develop and implement risk management plans. These plans were to help determine where risk was most concentrated. Within these plans were also required documentation and reporting on how the risk management activities were being handled. If any activity was not included in the plan then it was to be held accountable.
As part of the RESPA laws financial institutions were required to develop and maintain internal policies and plans for addressing risk. When applying for a mortgage or a loan, these financial institutions had to submit these policies and plans to the Office of the Secretary of Housing and Urban Development. Every financial institution that took this exam for me was required to submit one of these policies. This helped to ensure that the housing market and mortgage industry were well regulated. It also meant that if something in the system was going to cause a loss then the RESPA laws would protect the consumer from a great deal of financial harm. As a result, taking the exam for me to guarantee this protection became an excellent choice.
One of the things that you will learn in the course of studying to pass the exam for the Registered Financial Analyst is risk management within financial products. You will learn about common products such as credit cards, savings accounts, mortgage loans, and money market accounts. You will also be introduced to other types of risk such as international finance risk and alternative sources of risk. Learning about each type of risk and how to evaluate them will help you pass your exam for Registered Financial Analyst. After you pass the exam for the Registered Financial Analyst position you will have two years of service with the company upon which the exam is based.