Basel norms and frameworks are recently
in news, is related to which of the following
sector?
(A) Healthcare Sector
(B) Industrial Sector
(C) Banking Sector
D) None of the above
Answers
Mark as brainliest answer to get points
ANSWER:
c. Banking Sector with regard to Basel III norms
EXPLANATION:
Basel III is a globally approved series of measures created by the ‘Basel Committee on Banking Supervision’ in reaction to the 2007-09 global financial crisis. At times, banks with strong capital ratios may still fail owing to the unexpected failure of a counter-party or group of related counter-parties. To tackle this risk and to counterpart the Basel III framework, the ‘Basel Committee on Banking Supervision’ has circulated its final norm on ‘large exposures (LEX)’ which intends to make sure that LEX to counter-parties are properly scrutinised and restricted.
The ‘Basel Committee on Banking Supervision’ had stated in July 2019 that India has complied with the regulation/norms of Basel III on LEX though, in certain respects, the regulations are stricter than the Basel LEX framework. The LEX framework relates to all scheduled commercial banks in addition to regional rural banks. The LEX framework is intended at tackling the concentration risk which may arise due to a bank’s exposure to its counter-parties, which give rise to concentration of its assets to a sole counter-party or a set of related counter-parties.