Basel III

What type of mortgages triggered the turmoil mentioned in the article?

• Subprime mortgages

• Fixed-rate mortgages

• Reverse mortgages

• Adjustable-rate mortgages

What type of financial regulation is mentioned in the article?

• Capital adequacy regulation

• Interest rate regulation

• Tax regulation

• Trade regulation

What is one of the problems of internal risk models according to the deficiencies of Basel II?

• They work perfectly in all situations.

• They can overestimate exposure to risk.

• They can significantly underestimate exposure to risk.

• They have no problems in estimating rare events.

What difficulty do banks face when measuring rare events according to Basel II?

• They have no difficulties.

• They have difficulties estimating rare but large events.

• They can measure rare events accurately.

• They only have problems with common events.

What is the percentage of the additional buffer according to Basel III?

• 2.5%

• 1.5%

• 3.5%

• 4.5%

What is the percentage of the Capital Conservation Buffer under Basel III?

• 0%

• 2.50%

• 4%

• 8%

What leverage ratio is required for 8 SIFIs in the U.S. under Basel III?

• 2%

• 4%

• 6%

• 8%

What is the range of the countercyclical buffer under Basel III?

• 0% to 1.50%

• 0% to 2.50%

• 1% to 3%

• 2% to 4%

What is expected of a Systemically Important Financial Institution (SIFI) under Basel III?

• To follow the recommendations of Basel II

• To not follow any recommendations

• To go beyond the recommendations of Basel III

• To maintain the same level of capital

What must the net stable funding ratio (NSFR) exceed according to Basel III?

• Long-term commitments

• Short-term income

• Operating expenses

• Short-term investments