The Primary Difference Between Basel I and the Proposed Basel

question 80

Multiple Choice

The primary difference between Basel I and the proposed Basel III in converting OBS values to on-balance-sheet credit equivalent amounts is

• A)the use of credit ratings in Basel III to assign credit risk weights on the OBS activities.
• B)the use of six weight classes by Basel III rather than four classes.
• C)the use of the underlying counterparty activity in Basel II to assign credit risk weights on the OBS activities.
• D)All of the options.
• E)a heavier reliance on the use of ratings by external credit rating agencies for the assignment of assets to weight classes and the use of the underlying counterparty activity in Basel II to assign credit risk weights on the OBS activities.

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Definitions:

Multicomponent Therapy

A therapeutic approach that integrates several different techniques and components to address multiple aspects of a disorder or issue.

Mediation Studies

Research focused on the examination of processes through which interventions or variables produce their effects, often used in conflict resolution and peace studies.

Systematic Desensitization

A behavioral therapy technique aimed at reducing anxiety through gradual exposure to the feared object or situation coupled with relaxation exercises.

Operant Conditioning

A learning process in which the likelihood of a behavior is increased or decreased through reinforcement or punishment.