Question: According to provisions set down by the Basel Committee, if a bank adopts the standard method, are the following statements true or false? There
According to provisions set down by the Basel Committee, if a bank adopts the standard method, are the following statements true or false?
• There are cases which provide for the same capital requirements for corporate exposures as for project finance exposures.
• For AAA and AA+ rating classes, capital requirements for project finance are higher than those applied to corporate exposures.
• The capital requirements for project finance loans are higher than those applied for corporate exposures for all rating classes below BB+.
• A GOOD rating is equivalent to rating classes ranging from BB+ to BB- inclusive.
• The greatest treatment differential (meaning the difference between applicable percentages) is applied for AAA class.
• The risk underlying the SATISFACTORY class for project finance deals is equivalent to that underlying BB- or B+ rating classes for corporate exposures.
• There are cases which provide for the same capital requirements for corporate exposures as for project finance exposures.
• For AAA and AA+ rating classes, capital requirements for project finance are higher than those applied to corporate exposures.
• The capital requirements for project finance loans are higher than those applied for corporate exposures for all rating classes below BB+.
• A GOOD rating is equivalent to rating classes ranging from BB+ to BB- inclusive.
• The greatest treatment differential (meaning the difference between applicable percentages) is applied for AAA class.
• The risk underlying the SATISFACTORY class for project finance deals is equivalent to that underlying BB- or B+ rating classes for corporate exposures.
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