Financial Awareness - Risk, Stability & Emerging Finance
Which of the following is a key objective of Basel III norms?
Which of the following is a key objective of Basel III norms?
medium Q7 of 15
Step-by-Step Solution
Step 1: Understand Basel III objectives
Basel III was developed to address weaknesses revealed by the 2008 financial crisis.Step 2: Analyze objectives
It aims to strengthen bank capital requirements and introduce liquidity risk management through LCR and NSFR.Step 3: Eliminate incorrect options
Reducing credit risk only is Basel I focus; market discipline and supervisory review are Basel II; eliminating all operational risks is unrealistic.Final Answer:
To strengthen bank capital and improve liquidity risk management → Option AQuick Check:
Basel III objective = Capital and liquidity risk management ✅
Quick Trick: Basel III = capital + liquidity focus.
Common Mistakes:
- Confusing Basel III with Basel I or II objectives.
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