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FRM Part II · FRM Exam Part II · Solvency, Liquidity and Other Regulation After the Global Financial Crisis

Which of the following is one of the five categories of indicators used in the Basel methodology to assess a bank's G-SIB score?

Substitutability/financial institution infrastructure is one of the five G-SIB indicator categories, alongside size, interconnectedness, complexity and cross-jurisdictional activity. Profitability measures like return on equity or net interest margin, and credit ratings, are not used in the scoring methodology.

  1. ASubstitutability/financial institution infrastructureCorrect
  2. BNet interest margin
  3. CReturn on equity
  4. DCredit rating of senior debt

Explanation

The five categories are size, interconnectedness, substitutability/financial institution infrastructure, complexity, and cross-jurisdictional activity. Profitability measures and credit ratings are not part of the score.

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