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.

---

Definitions:

Interactions

The processes or actions taken wherein two or more entities or variables affect or influence each other.

Concepts

Broad and general ideas that are fundamental building blocks of theories or models used to classify and organize specific observations.

Patterns

Regularities or trends in data indicating a repeatable sequence or relationship among variables.

Behavior Change

The process of altering or modifying human behaviors, typically aimed at improving health, social, or environmental outcomes.