CAIIB BFM Unit 24 Capital Adequacy - Basel II Overview

Market discipline involves disclosure should be made on ... basis
a. half yearly
b. yearly
c. monthly
d. quaterly
Ans- a

Tier 1 capital is also known as
ans- Core Capital

tier 2 capital is also known as
Ans- supplementary capital

Which approach is used for credit risk?
a. standardised approach
b. Basic Indicator approach
c. Standarised Duration approach
Ans- a

Which approach is used for operational risk?
a. standardised approach
b. Basic Indicator approach
c. Standarised Duration approach
Ans- b

Which approach is used for market risk?
a. standardised approach
b. Basic Indicator approach
c. Standarised Duration approach
Ans- c

Supplementary capital comprises subordinated debt of more than .... years maturity?
Ans- 5

Formulae of Risk Weighted Assets?
Ans- Risk weight for credit risk+12.5*capital req for market risk+12.5*capital req for operational risk

How Many pillars are there in basel 2?
Ans- 3

Name the 3 pillars of Basel 2.
Ans- Minimum capital requirements, supervisory review process,market discipline

Tier 3 capital allowed by rbi.
Ans- Presently not

..... bank is defined as a group of entities where a licenced bank is a controlling entity.
Ans- Consolidated Bank

Basel 2 capital requirements apply to .....banks
Ans- Internationally active banks

Small Ticket loans?
Ans- Retail lending

Basel 1 Accord weakness?
100% risk weight for all corporate loan and only credit risk was covered

Short term bond maturity period in TIER 3?
Ans- 2 years

Capital adequacy ratio formula?
Regulatory capital/total risk  weighted asset

Basel 1 made in .....and Vogue for ....Years?
1988,15 years