PILLAR 1 OF THE BASEL II FRAMEWORK ALLOWS BANKS TO USE VARIOUS APPR...
2.
Pillar 1 of the Basel II framework allows banks to use various approaches to calculate the capital requirements
for credit risk, operational risk and market risk. Which of the following Basel II approaches allows a bank to
explicitly recognize diversification benefits?
a.
The internal models approach for market risk
b.
The internal ratings based approach for credit risk
c.
The basic indicator approach for operational risk
d.
The standardized approach for operational risk