1. The Basel Committee on Banking Supervision prescribes risk-based standards for capital adequacy and liquidity. Which of the following is a goal stipulated by the Basel Committee?
[I] Improve the consistency of capital requirements across banks in different countries
[II] Encourage a greater level of risk management practices especially among international financial institutions
[III] Increase the deposit insurance coverage for all banks
[IV] Make regulatory capital more risk sensitive
[V] Increase the spread between the deposit rate and the lending rate so as to improve the net interest margin of banks
[VI] Ensure that banks have sufficient high-quality liquid assets to cover their net cash flows
I, III, V
II, III, IV, V
I, II, IV, VI
All are correct
2. The Basel Accords contain a set of recommendations on bank regulation, supervision, and risk management issued by the:
Basel Committee on Banking Supervision
Federal Reserve System of the United States
International Monetary Fund (IMF)
Bank for International Settlements
3. Under Basel III, total regulatory capital now includes
[I] Tier 1 capital,
[II] Capital conservation buffer,
[III] Countercyclical capital buffer, and
[IV] additional capital for systemically important banks.
I, II only
II and IV only
II, III, IV only
All are included