Financial Risk Manager Part 2

Get started today

Ultimate access to all questions.

In regard to Basel II minimum capital requirements, which of the following is false?

Exam-Like

Community

LLeetQuiz

A

Banks can reduce their capital charge, subject to a limit, if they can demonstrate diversification benefit due to imperfect correlation between the major risk buckets: credit, operational and market risk.

B

Comments

Loading comments...

Pillar Two explicitly encourages national authorities (supervisors) to supplement Pillar One with additional capital requirements at their discretion if they deem appropriate.

C

Under the advanced/internal approaches, all three risk categories (credit, market, and operational risk) employ value at risk (VaR) concepts.

D

Basel II had no explicit charge for liquidity risk.

Powered ByGPT-5.2