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    Question

    Banks are expected to identify connected counterparties

    based on economic interdependence when total exposure exceeds what percentage of the eligible capital base?
    A 2% Correct Answer Incorrect Answer
    B 3% Correct Answer Incorrect Answer
    C 5% Correct Answer Incorrect Answer
    D 7% Correct Answer Incorrect Answer
    E 10% Correct Answer Incorrect Answer

    Solution

    If a bank’s exposure to an individual counterparty exceeds 5% of the eligible capital base, it must determine if the entity has economic dependencies with other counterparties that might create concentration risk.

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