A Criticism of the Basel I Risk-Based Capital Ratio Is

question 61

Multiple Choice

A criticism of the Basel I risk-based capital ratio is

• A)the incorporation of off-balance-sheet risk exposures.
• B)the application of a similar capital requirement across major banks in international banking centers across the world.
• C)the more systematic accounting of credit risk differences.
• D)the lack of appropriate consideration of the portfolio diversification effects of credit risk.
• E)Answers B and C only.

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