Question: In each case below, indicate whether the item is a reason why regulators created a leverage capital requirement in addition to a risk - based
In each case below, indicate whether the item is a reason why regulators created a leverage capital requirement in addition to a riskbased capital requirement.
They wanted to ease the regulatory burden on banks by letting them choose which requirement to meet.
The risk weights in the riskbased requirement could be inaccurate leg too
low for some risk categories
The riskbased requirement only took into account credit risk and not other forms of risk such as interest rate risk.
Briks could game the riskbased requirement by shifting to riskler, Migher: yielding assets within riak categories.
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