Risk Management interview preparation

Questions

100

Traced to a firm

37

Firms

12

Updated

September 2026

Asked at

All firmsUBS14MSCI7BLBlackRock5FTFranklin Templeton3Oaktree Capital Management2Scotiabank2Jane Street1Moody's1Neuberger Berman1PIMCO1SSState Street1TSTruist Securities1

Topic

All topicsMarket risk and VaR14Tail risk and stress testing5Greeks and sensitivities5Credit risk11Counterparty risk and CVA6Operational risk5Model risk and validation6Regulatory capital7Liquidity risk and ALM6Statistics and quant foundations7Indian regulation7Risk governance and appetite4Markets and macro9Fit and career8

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseBrainteaserMarket viewFit

1. 059A bank reports CET1 of 11 percent against a 9 percent requirement. Is it safe?Regulatory capitalHardsuperdayRegulatory reportingBank credit risk

   Say this

   Not from that number alone. A capital ratio tells you about solvency under the RWA model, and banks fail from liquidity and from concentration, not from a ratio. I'd want to know the composition of the denominator, the funding profile and the trajectory before answering.

   Then walk it

   1. First, what's the 9 percent made of? Pillar 1 minimum, plus the conservation buffer, plus Pillar 2, plus any systemic surcharge. If the 9 percent is mostly buffer, breaching it restricts dividends rather than triggering resolution, which is a different kind of 2 percent of headroom.
   2. Second, interrogate the denominator. RWA density against total assets, how much is IRB-modelled, and single-name and sector concentration. An 11 percent ratio on a book with 25 percent in one sector is far weaker than the same ratio on a granular one, and the IRB formula won't show it.
   3. Third, the trajectory, which is what actually matters. Was it 13 percent two years ago? Is it falling through loan growth, buybacks or rising provisions? The direction and the stress path matter more than the level.
   4. Fourth, and this is the real answer, liquidity. SVB had a capital ratio comfortably above requirement the week it failed. Look at LCR, NSFR, deposit concentration, the uninsured deposit share, and unrealised losses in held-to-maturity securities that don't touch CET1 until they're sold.
   5. Fifth, asset quality and provision adequacy. Coverage ratio, NPL ratio, Stage 2 share, and whether provisioning looks light relative to peers. A thin provision stock means the capital ratio is borrowing from the future.
   6. Sixth, the stress result. What does CET1 do in the adverse ICAAP or supervisory scenario? If it drops to 8 percent, the 2 percent buffer is already spoken for and the bank is effectively at its constraint.
   7. So my answer would be: 11 against 9 is adequate headroom on a granular, well-funded, well-provisioned book with a stable trajectory, and thin on a concentrated book with a volatile funding base. And I'd say what I'd need to see rather than guess, because the interviewer is testing whether I'll commit to a number without the information.

   Where candidates lose it

   Answering yes or no. There isn't enough information, and the interviewer is testing whether you know that solvency ratios don't capture liquidity or concentration. SVB is the example that proves it, and naming unrealised held-to-maturity losses is the detail that lands.

   Expect next

   • What would you want to see to be comfortable?
   • SVB had a fine capital ratio. Why did it fail?
   • Does breaching the buffer requirement mean the bank fails?

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.