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Pillar 1 of the Basel II framework allows banks to use various approaches to calculate the capital requirements for credit risk, operational risk, and market risk. Which of the following Basel II approaches allows a bank to use its own estimates of recovery rates?
A
The standardized measurement approach for operational risk
B
The advanced internal ratings-based approach for credit risk
C
The foundation internal ratings-based approach for credit risk
D
The fundamental review of the trading book (FRTB) approach for securitized products