20-37 Basel I requires banks in the member countries of the Bank for International Settlements to utilize risk-based capital ratios.

Question

Quizplus · Accepted Answer

Basel I does indeed require banks to calculate their capital ratios based on the risk associated with their assets. This was a significant change from earlier regulatory frameworks, which did not differentiate between different types of assets and their risks. The risk-based approach of Basel I was meant to provide a more accurate picture of a bank's financial health and to encourage banks to hold more capital against riskier assets.

20-37 Basel I Requires Banks in the Member Countries of the Bank