Operations/Credit Card Risks
October 5th, 2022
I need some help getting started on the following scenario:
You are hired as the director of credit card operations for Western Bank. Explain to the board of directors the primary risks involved with a credit card operation and ways to deal with those risks. Be sure to address the following in your report:
– Credit risk
– Transaction risk
– Liquidity risk
– Interest rate risk
– Is it a good idea of the bank to assess the risk of credit cards? Why or why not? How does a bank know if it can afford to take these risks?
– What are the potential benefits to banks?