The implementation of BIS capital requirements may be expected to:
A)increase the downward trend in loan sales because of higher required capital levels
B)increase the downward trend in loan sales because of the use of risk-adjusted assets
C)decrease the downward trend in loan sales because of the use of risk-adjusted assets and because of higher required capital
D)decrease the downward trend in loan sales because of the use of risk-adjusted assets and because of lower required capital levels

Question

Quizplus · Accepted Answer

The use of risk-adjusted assets can help to mitigate the impact of capital requirements on loan sales, as it allows for a more nuanced assessment of risk. Also, while higher capital requirements may initially lead to a decrease in lending activity, it can also lead to greater financial stability in the long term, which can attract more lending activity. Therefore, the combination of risk-adjusted assets and higher required capital could potentially mitigate the negative impact on loan sales.

The Implementation of BIS Capital Requirements May Be Expected To