Which of the Following Is True About the Capital Conservation

Which of the following is true about the capital conservation buffer added under Basel III?

A) It is added to Basel III to ensure that large international banks
Build up a capital buffer in favorable periods that can be drawn upon later in unfavorable periods when losses occur.
B) When large international banks draw down on this buffer, banks are required to rebuild it by reducing distributions of earnings that are discretionary, such as reducing dividend payments, or bonus payments to managers and staff or raising new external equity capital.
C) The Basel III capital conservation buffer of 2.5% phased in by January 1, 2019 comprised of Common Equity Tier 1 capital provides a regulatory minimum capital requirement as a buffer against losses in addition to other capital requirements.
D) All of the above.