CISSP Question of the Week courtesy of Transcender Labs.
Which pillar of Basel II determines the lowest amount of funds that a financial institute must keep on hand?
A. Market Discipline
B. Supervision
C. Privacy
D. Minimum Capital Requirements
The correct answer is D.
The Minimum Capital Requirements pillar of Basel II determines the lowest amount of funds that a financial institute keeps in hand.
Basel II is an accord that went into effect in 2006. This accord affects financial institutions. Its three main pillars are as follows:
- Minimum Capital Requirements — determines the lowest amount of funds that a financial institute must keep in hand.
- Supervision — ensures oversight and review of risks and security measures.
- Market Discipline — requests members to disclose risk exposure and to validate market capital.
Related Course
CISSP Certification Prep Course
CISSP Question of the Week Series
- CISSP Question of the Week: Pillar of Basel II
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