{"id":39361,"date":"2024-04-25T12:21:35","date_gmt":"2024-04-25T12:21:35","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=39361"},"modified":"2024-04-25T12:21:36","modified_gmt":"2024-04-25T12:21:36","slug":"upsc-prelims-2015-question-65","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-65\/","title":{"rendered":"UPSC Prelims 2015 &#8211; Question 65"},"content":{"rendered":"\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69d46fcc5ac86\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d46fcc5ac86\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-65\/#65%E2%80%98Basel_III_Accord_or_simply_%E2%80%98Basel_III_often_seen_in_the_news_seeks_to\" title=\"65.\u2018Basel III Accord\u2019 or simply \u2018Basel III\u2019, often seen in the news, seeks to\">65.\u2018Basel III Accord\u2019 or simply \u2018Basel III\u2019, often seen in the news, seeks to<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-65\/#The_correct_answer_is%E2%80%AFOption_2\" title=\"The correct answer is\u202fOption 2.&nbsp;\">The correct answer is\u202fOption 2.&nbsp;<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-65\/#Additional_Information\" title=\"Additional Information&nbsp;\">Additional Information&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-65\/#Important_Points\" title=\"Important Points&nbsp;\">Important Points&nbsp;<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2015-question-65\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"65%E2%80%98Basel_III_Accord_or_simply_%E2%80%98Basel_III_often_seen_in_the_news_seeks_to\"><\/span>65.\u2018Basel III Accord\u2019 or simply \u2018Basel III\u2019, often seen in the<br>news, seeks to<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\"><li>a) develop national strategies for the conservation and sustainable use of biological diversity<\/li><li>b) improve banking sector\u2019s ability to deal with financial and economic stress and improve risk management<\/li><li>c) reduce the greenhouse gas emissions but places a heavier burden on developed countries<\/li><li>d) transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluoro carbons in refrigeration with harmless chemicals<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_correct_answer_is%E2%80%AFOption_2\"><\/span>The correct answer is\u202f<strong>Option 2.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Basel-III Accord:<\/strong>&nbsp;<ul><li>It was issued in\u202f<strong>2010<\/strong>\u202fas a response to the\u202f<strong>financial crisis of 2008.<\/strong>&nbsp;<\/li><li><strong>It aims to promote a resilient banking system by focusing on capital leverage funding and liquidity. Hence, Option 2 is correct.<\/strong>&nbsp;<\/li><li>The\u202f<strong>capital adequacy ratio<\/strong>\u202fwas fixed at\u202f<strong>12.9%.\u202f<\/strong>&nbsp;<\/li><li>The<strong>\u202fleverage rate<\/strong>\u202fwas fixed at\u202f<strong>3%.\u202f<\/strong>&nbsp;<\/li><li><strong>The banks&#8217; strength\u202f<\/strong>was improved<strong>\u202fLiquidity Coverage Ratio and Net Stable Fund Rate.\u202f<\/strong>&nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Additional_Information\"><\/span><strong>Additional Information<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Basel Committee:<\/strong>&nbsp;<ul><li>Basel accords refer to the\u202f<strong>Banking supervision accords\u202f<\/strong>issued by the\u202f<strong>Basel Committee on banking supervision.<\/strong>&nbsp;<\/li><li>The Basel Committee on banking supervision is a global standard committee<strong>\u202ffor the regulation of banks.\u202f\u202f<\/strong>&nbsp;<\/li><li>It was<strong>\u202festablished by the central bank governors of 10 countries in 1974.<\/strong>&nbsp;<\/li><li>Its\u202f<strong>objective<\/strong>\u202fis to<strong>\u202fimprove the quality of banking supervision<\/strong>\u202fworldwide.&nbsp;<\/li><li>The\u202f<strong>headquarters<\/strong>\u202fis in\u202f<strong>Basel<\/strong>, a city in\u202f<strong>Switzerland<\/strong>.&nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Basel Norms:<\/strong>&nbsp;<ul><li>Basel norms are the\u202f<strong>international banking regulations to strengthen<\/strong>\u202fthe international banking system.&nbsp;<\/li><li>It is in the form of an\u202f<strong>agreement by the Basel Committee of Banking supervision<\/strong>\u202fwhich mainly\u202f<strong>focuses on the risk to banks and the financial system.\u202f<\/strong>&nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Points\"><\/span><strong>Important Points<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Basel-I norms:<\/strong>&nbsp;<ul><li>Basel, I was introduced in\u202f<strong>1988<\/strong>\u202fand focused on\u202f<strong>credit risk<\/strong>.&nbsp;<\/li><li>India adopted\u202f<strong>Basel 1 guidelines in 1999<\/strong>\u202fas it defines the\u202f<strong>capital and structure of risk weights for banks<\/strong>.&nbsp;<\/li><li>The\u202f<strong>minimum Capital requirement\u202f<\/strong>was fixed at<strong>\u202f8% of risk-weighted assets.<\/strong>&nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Basel-II norms:<\/strong>\u00a0<ul><li>Basel II norms were established in\u202f<strong>2000<\/strong>\u202fand were based on t<strong>hree parameters capital adequacy requirement,\u202fsupervisory requirement, and market discipline.<\/strong>\u00a0<\/li><li>A\u202f<strong>minimum capital adequacy requirement<\/strong>\u202fof<strong>\u202f8% of risk-weighted assets<\/strong>\u202fwas fixed.\u202f\u202f\u00a0<\/li><\/ul><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688\" width=\"781\" height=\"182\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-c6ab63ae-7083-4831-b519-cb89dacafb18\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p id=\"block-52c5a91b-6ed6-46e3-b781-7cc0c63a0b76\">For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p id=\"block-d014fe86-d628-49d8-82ce-6c60dc6e7a73\">For Daily Updates and Study Material:<\/p>\n\n\n\n<p id=\"block-38177954-e668-4d8d-b250-d0fbd5a09390\">Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\" id=\"block-49ca2fe3-109f-4a88-b72e-9df49c3d328e\"><li>1. 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