Under Basel II banks are required to ensure that their capital exceeds 8 per cent of their risk-weighted assets.

Question

Quizplus · Accepted Answer

This statement is true. Basel II requires banks to maintain a minimum capital adequacy ratio (CAR) of 8%, which is calculated as Tier 1 capital divided by risk-weighted assets. Tier 1 capital includes equity capital and retained earnings, while risk-weighted assets are adjusted based on the credit risk associated with different types of assets.

Under Basel II Banks Are Required to Ensure That Their