Under Basel III, OBS Contingent Guarantee Contracts Are Assigned the Same

question 100

True/False

Under Basel III, OBS contingent guarantee contracts are assigned the same risk weights as on-balance-sheet principal items to determine their risk-adjusted asset values.

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Definitions:

Negotiable Instrument

A formal document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee's name either mentioned or left blank.

Uniform Commercial Code

A complete collection of regulations that oversee every business transaction within the United States.

Electronic Banking

The conduct of banking activities through electronic means, including online banking, ATMs, and electronic payments.

Drawer

In the context of banking and finance, the person who writes or issues a check or draft instructing the drawee to pay someone else.