<<123456789101112131415>> 1. What is the primary focus of the Basel-I accord?Operational risksMinimum capital requirements for banksMarket disciplineRisk-weighted assetsQuestion 1 of 15 2. When was the Basel-I accord made, and how long has it been in effect?2004, 20 years1999, 10 years1988, 15 years2006, 5 yearsQuestion 2 of 15 3. What were the limitations of the Basel-I accord, leading to a revision in 2004?Lack of market disciplineInadequate capital for operational risksWeak risk management practicesAll of the aboveQuestion 3 of 15 4. What are the three pillars of the Basel-II accord?Minimum capital requirement, regulatory capital, market disciplineOperational risks, credit risks, market disciplineMinimum capital requirement, supervisory review process, market disciplineTier 1 capital, Tier 2 capital, systemic risksQuestion 4 of 15 5. How is the capital adequacy ratio calculated?Tier 1 capital/Total risk weighted assetsRegulatory capital/Tier 2 capitalRegulatory capital/Total risk weighted assetsTier 1 capital/Tier 2 capitalQuestion 5 of 15 6. What is the purpose of the supervisory review process under Basel-II?Ensure compliance with operational risksAssess internal capital, capital adequacy assessments & strategyCalculate market discipline ratiosAllocate Tier 1 capitalQuestion 6 of 15 7. What does the third pillar of Basel-II accord deal with?Minimum capital requirementOperational risksMarket disciplineSupervisory review processQuestion 7 of 15 8. What information is required for market participants according to the Basel Capital Adequacy Framework?Only quantitative disclosuresProprietary and confidential informationInformation consistent with audited returnsBoth qualitative and quantitative disclosuresQuestion 8 of 15 9. What comprises regulatory capital for calculating the capital adequacy ratio?Tier 1 and Tier 2 capitalOperational risks and credit risksSystemic risks and market risksTotal risk weighted assetsQuestion 9 of 15 10. What is the purpose of stipulating buffers in the supervisory review process?Enhance market disciplineEnsure capital adequacy and address uncertaintiesAllocate Tier 1 capitalAssess internal capital strategiesQuestion 10 of 15 11. Tier-II capital is restricted to ___ of Tier-I capital.125%100%50%9%Question 11 of 15 12. How is any capital requirement arising out of credit and counterparty risk to be met?By Tier I and Tier II capitalBy Tier I capital onlyBy Tier II capital onlyBy Tier III capital aloneQuestion 12 of 15 13. What is the recommended principle for ICAAP formulation?ICAAP should follow a bottoms up approachICAAP should never be discussed with or disclosed to publicICAAP should encompass firm-wide risk profileICAAP should be monitored and managed in silosQuestion 13 of 15 14. What is the scope of disclosures under Pillar III?Disclosures must be granular and must be made at unit levelPillar 3 applies at the top on consolidated level of the banking group to which the capital adequacy Framework appliesIndividual units should declare and no consolidation requiredDisclosure is meant for entities identified by market or RegulatorQuestion 14 of 15 15. Disclosure of capital requirements for credit risk falls under which category?Qualitative disclosuresAnalytical disclosuresPrincipal disclosuresQuantitative disclosuresQuestion 15 of 15 Loading...
