Which of the following statements is not true with respect to the proposed Basel

Question

Which of the following statements is not true with respect to the proposed Basel II Accord?


a) Basel II provides an incentive for banks to reduce their operational risk.

b) The Accord provides for an alternative method of calculating credit risk in the form of the internal ratings-based (IRB) approach.

c) Basel II should encourage banks to use more aggressive management.

d) The Basel Committee defines operational risk as the risk of losses resulting from inadequate or failed internal processes or systems.

Explanation / Answer

c) Basel II should encourage banks to use more aggressive management.

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