The Risk-Based Capital Requirements Have Received Several Types of Criticism

question 104

Short Answer

The risk-based capital requirements have received several types of criticism.Please match the criticism headings below (as stated in the text)with the appropriate criticism explanations in questions 20-122 to 20-130.
-20-123 Because rating agencies often lag rather than lead the business cycle,risk weights based on a loan's credit rating may not accurately measure the relative risk exposure of individual borrowers.
A)Competition
B)DI specialness
C)Excessive complexity
D)Impact on capital requirements
E)Other risks
F)Pillar 2 may ask too much of regulators
G)Portfolio aspects
H)Risk weights
I)Risk weights based on external credit rating agencies

• A)Competition
• B)DI specialness
• C)Excessive complexity
• D)Impact on capital requirements
• E)Other risks
• F)Pillar 2 may ask too much of regulators
• G)Portfolio aspects
• H)Risk weights
• I)Risk weights based on external credit rating agencies

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Definitions:

Immunoglobulin

Antibody found in the gamma globulin portion of plasma.

Inflammation

A biological response to harmful stimuli, such as pathogens or damaged cells, involving immune cells, blood vessels, and molecular mediators to facilitate healing.

Tolerance

The process by which the response to a substance decreases with repeated exposure, leading to the need for increased amounts to achieve the same effect.

Antigens

Substances that provoke an immune response in the body, often foreign proteins or polysaccharides that are recognized by antibodies or immune cells.