📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Consider the following statements about Basel III

    norms: 1. Pillar 2 focuses on Supervisory Review Process. 2. Common Equity Tier 1 (CET1) is the highest quality of bank capital. 3. The Net Stable Funding Ratio (NSFR) is a short-term liquidity tool for 30 days. Which of the statements above is/are correct? 
    A 1 and 2 only Correct Answer Incorrect Answer
    B 2 and 3 only Correct Answer Incorrect Answer
    C 1 and 3 only Correct Answer Incorrect Answer
    D 1, 2, and 3 Correct Answer Incorrect Answer
    E 2 only Correct Answer Incorrect Answer

    Solution

    Statement 3 is incorrect. NSFR is a long-term liquidity ratio (over a 1-year horizon), while the Liquidity Coverage Ratio (LCR) is for the 30-day stress period.

    Practice Next
    More General Topics in Finance Questions

    Relevant for Exams:

    ask-question