The Measurement of Credit Risk Under the Basel II Accord

question 23

Multiple Choice

The measurement of credit risk under the Basel II Accord allows banks to choose between

• A)a standardized approach similar to that used under Basel I.
• B)a basic indicator approach that will cause banks to hold an additional 12 percent of capital.
• C)an internal rating system in which they must adhere to strict methodological and disclosure standards.
• D)All of the options.
• E)a standardized approach similar to that used under Basel I and an internal rating system in which they must adhere to strict methodological and disclosure standards.

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