20-102 The measurement of credit risk under the Basel II Accord allows banks to choose between

Question

Quizplus · Accepted Answer

The measurement of credit risk under the Basel II Accord allows banks to choose between a standardized approach similar to that used under Basel I, or an internal rating system in which they must adhere to strict methodological and disclosure standards. The basic indicator approach that will cause banks to hold an additional 12 percent of capital is not a choice but a requirement for banks that do not qualify for either of the other options. Therefore, the correct answer is A and C only.

20-102 the Measurement of Credit Risk Under the Basel II