Which of the following is true regarding CAMELS and the Basel Accords? a. CAMELS

Question

Which of the following is true regarding CAMELS and the Basel Accords?

      
a. CAMELS are a set of regulatory rules to evaluate the soundness, health, and riskiness of FIs.

b. The purpose of the Basel Accords create a set of enforceable regulations for FIs to reduces their various risk aspects.
      
c. CAMELS is a rating system to evaluate the condition of FIs, however academic literature has been inconclusive on its usefulness.
      
d. The Basel Accords is not continually updated to improve safety of FIs around the world.
      
e. None of the above.

Explanation / Answer

The purpose of the Basel Accords create a set of enforceable regulations for FIs to reduce their various risk aspects. (which is Option B)

____________

Details Provided Below:

Option A is not correct because CAMELS is a credit rating system used to evaluate the condition of financial institutions. It is not a set of regulatory rules as mentioned in the option.

Option C is not correct as CAMELS is used in the evaluation various types of financial institutions both in and out of U.S.A. The credit rating system has proven to be effective in the overall supervisory review and evaluation of financial institutions.

Option D is not correct as Basel Accords are continually updated to improve the condition of FIs. Already, three Basel Accords (I, II and III) have been passed.

Option E is not correct, as Option B is a true answer.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.