📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      What is the main objective of 'Pillar 3' of the Basel

      Framework? 
      A To set the minimum capital requirements. Correct Answer Incorrect Answer
      B To empower the RBI to take over weak banks. Correct Answer Incorrect Answer
      C To promote market discipline through mandatory public disclosures of risk and capital. Correct Answer Incorrect Answer
      D To encourage banks to invest in green energy. Correct Answer Incorrect Answer
      E To limit the number of branches a bank can open. Correct Answer Incorrect Answer

      Solution

      Pillar 3 (Market Discipline) requires institutions to publish their risk profiles and capital adequacy ratios so that the public and investors can judge the safety of the institution. The main objective of Pillar 3 (Market Discipline) of the Basel Framework is to enhance financial transparency and safety by requiring banks to publicly disclose key information regarding their capital structure, risk exposures, and risk management processes. This allows market participants to better assess an institution's financial health, thereby promoting sound, market-driven risk management. 

      Practice Next
      More Accounts Questions

      Relevant for Exams:

      ask-question