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Explanation:
Under Basel II, national regulators are indeed allowed to permit a bank to use an Alternative Standardized Approach (ASA) under certain circumstances. Therefore, the statement "Under no circumstances does Basel II allow a national regulator to permit a bank to use an alternative standardized approach" is incorrect. All other statements correctly describe the Basic Indicator Approach, the Standardized Approach, and the Advanced Measurement Approaches.
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Q.64 Which of the following statements about the methodologies for calculating an operational risk capital charge in Basel II is incorrect?
A
The basic indicator approach does not reflect the operational risk in a firm since it uses only income as a driver
B
The standardized approach assumes that different business lines have different multipliers
C
Under no circumstances does Basel II allow a national regulator to permit a bank to use an alternative standardized approach
D
Advanced measurement approaches allow an institution to adopt its own method of assessment of operational risk