Knowledge Base

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Questions

Which risks are covered by minimum capital requirements under Basel II?

Credit risk
Market risk
Operational risk
Political risk

Which event directly led to the creation of the Basel Committee in 1974?

The Latin American debt crisis
The failure of Bankhaus Herstatt
The 1997 Asian financial crisis
The collapse of Lehman Brothers

What is the minimum CET1 ratio required by Basel III?

2%
4.5%
6%
8%

What are the two fundamental guiding principles of the Basel Committee?

No banking system should escape supervision
Supervision must be adequate and consistent across member jurisdictions
Banks must maximise their profits
Regulators should only intervene in the event of a crisis

The LCR (Liquidity Coverage Ratio) requires that high-quality liquid assets divided by net cash outflows over 30 days reach at least 100%.

True
False

Categorize items by dragging them to the appropriate zones

Items to categorize:

LCR
NSFR
CET1
Categories:

Liquidity ratios

Capital ratios

Basel II introduced a three-pillar framework: capital requirements, supervisory review, and transparency.

True
False