New Register for Workshop on How to start for NABARD 2025 (Stepwise Plan) - Apr 26, 7 PM

    Question

    Which of the following components of capital adequacy

    is/are mandatory as per Basel III norms?                       I.        CET Capital                     II.        AT1 capital                    III.        CCB                   IV.        CCyB
    A Only I Correct Answer Incorrect Answer
    B I and II Correct Answer Incorrect Answer
    C I, II and III Correct Answer Incorrect Answer
    D I, II and IV Correct Answer Incorrect Answer
    E All are mandatory Correct Answer Incorrect Answer

    Solution

    The countercyclical buffer (CCyB) is intended to protect the banking sector against losses that could be caused by cyclical systemic risks. CCyB will be deployed by national regulators when excess aggregate credit growth is judged to be associated with a build-up of system-wide risk to ensure the banking system has a buffer of capital to protect it against future potential losses. This focus on excess aggregate credit growth means that regulators are likely to only need to deploy the buffer on an infrequent basis . Banks will be subject to a countercyclical buffer that varies between zero and 2.5% to total risk-weighted assets . The buffer that will apply to each bank will reflect the geographic composition of its portfolio of credit exposures’

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