One of the Criticisms of Basel 2 Is That It

question 39

Multiple Choice

One of the criticisms of Basel 2 is that it is procyclical. That means that

• A)banks may be required to hold more capital during times when capital is short.
• B)banks may become professional at a cyclical response to economic conditions.
• C)banks may be required to hold less capital during times when capital is short.
• D)banks will not be required to hold capital during an expansion.