One of the Criticisms of Basel 2 Is That It

Multiple Choice

One of the criticisms of Basel 2 is that it is procyclical. That means that

A) banks may be required to hold more capital during times when capital is short.
B) banks may become professional at a cyclical response to economic conditions.
C) banks may be required to hold less capital during times when capital is short.
D) banks will not be required to hold capital during an expansion.