Explanation:
When Basel II standards were introduced in the USA, banks had the option to choose from the Standardized approach, Internal rating based approach, and Advanced IRB approach.
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Q.2342 NYC Bank from New York, USA, is one of the largest banks in the USA. At the moment of the introduction of Basel II standards in the USA, it was free to choose the approach to use so as to meet credit risk capital requirements. What options did the bank have in this regard?
A
Standardized approach, Internal rating based approach, and Advanced IRB approach.
B
None, because the USA chose not to apply Basel II.
C
NYC Bank could only use standardized approach.
D
NYC Bank could only use the Foundation IRB approach.
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