Skip to content

FRM Part II · FRM Exam Part II · Basel III: Finalising Post-crisis Reforms

Which set of risk areas was revised in the Basel III finalisation package, alongside the introduction of the output floor?

The finalisation revised the credit risk standardised and IRB approaches, the CVA framework, the operational risk approach, and the leverage ratio exposure measure, and added the output floor. Liquidity ratios and capital definitions were set in earlier Basel III work, not in this package.

  1. ACredit risk standardised approach, IRB approach, CVA framework, operational risk standardised approach, and the leverage ratio exposure measureCorrect
  2. BOnly the liquidity coverage ratio and net stable funding ratio
  3. COnly Pillar 3 disclosure templates and supervisory colleges
  4. DOnly the definition of Tier 2 capital and the capital conservation buffer

Explanation

The finalised package revised the credit risk standardised and IRB approaches, the CVA framework, the operational risk framework (replacing earlier approaches with a single standardised approach), the leverage ratio (including a G-SIB buffer) and introduced the output floor. Liquidity ratios and capital definitions came from the earlier Basel III stage.

Did you get it right without looking?

One question tells you little. A timed set on Basel III: Finalising Post-crisis Reforms shows your real accuracy, how long you take and where you lose marks.

Practise Basel III: Finalising Post-crisis ReformsFree diagnostic mock

More Basel III: Finalising Post-crisis Reforms questions