Multiple Choice
Which of the following statements about leverage ratios under Basel III is correct?
A) The leverage ratio is the ratio of the bank's Tier 1 Capital to total assets of the bank, excluding its off- balance sheet exposures and derivatives.
B) The purpose of introducing a leverage ratio is to avoid the build-up of excess leverage that could potentially lead to a "credit crunch" in stressed conditions.
C) The leverage ratio under Basel III must be higher than 4%.
D) The leverage ratio is the ratio of the bank's Tier 1 and Tier 2 Capital to total assets of the bank, including its off-balance sheet exposures and derivatives.
Correct Answer:
Verified
Correct Answer:
Verified
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