Consider the following statements 1 Basel III guidelines were released in response to the financial ...........

Economic Affairs Types of Banks and Banking

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Consider the following statements

1) Basel III guidelines were released in response to the financial crisis of 2008.

2) Basel norms apply to both private and public sector banks.

Which of the given above statement (s) is/ are correct?

1 Only

2 Only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Both the statements are correct.

Basel III: responding to the 2007-09 financial crisis.
Even before Lehman Brothers collapsed in September 2008, the need for a fundamental strengthening of the Basel II framework had become apparent. The banking sector entered the financial crisis with too much leverage and inadequate liquidity buffers.
According to new Basel-III norms, which will kick in from March 2019, Indian banks need to maintain a minimum capital adequacy ratio (CAR) of nine percent, in addition to a capital conservation buffer, which would be in the form of common equity at 2.5 percent of the risk-weighted assets.