Credit Risk Management Basel Regulatory Framework 3

Question 1

Which Basel framework introduced the concept of Operational Risk capital charges?

Accepted Answer

Basel II

Answer

Basel I

Answer

Basel III

Answer

Basel IV

Question 2

What does 'risk-weighted assets' (RWA) measure in the context of Basel capital adequacy?

Accepted Answer

Assets adjusted for credit, market, and operational risk

Answer

Total assets multiplied by a uniform 8% factor

Answer

Only on-balance-sheet exposures

Answer

Assets net of loan loss provisions

Question 3

Under Basel III's 'output floor,' IRB-calculated RWAs cannot fall below what percentage of Standardized Approach RWAs?

Accepted Answer

72.5%

Answer

50%

Answer

60%

Answer

80%

Question 4

What is the definition of Tier 2 capital under Basel III?

Accepted Answer

Subordinated debt and general loan loss provisions

Answer

Common equity and retained earnings only

Answer

Short-term borrowings and money market instruments

Answer

Goodwill and intangible assets

Question 5

Which of the following is a key feature of the G-SIB (Global Systemically Important Bank) surcharge?

Accepted Answer

It requires additional CET1 based on systemic importance scores

Answer

It applies uniformly to all banks

Answer

It replaces the countercyclical capital buffer

Answer

It is mandatory only for US banks

Question 6

Under Pillar 3 of Basel, what is required of banks?

Accepted Answer

Market discipline through public disclosure of risk and capital information

Answer

Internal calculation of economic capital

Answer

Supervisory approval of all loan exposures

Answer

Mandatory use of external credit ratings