4.8 B. Which of the following statements is true? A. Basel II broadened measures for measurement of capital and introduced the concept of two pillars to protect the solvency of individual Fls whereas Basel III introduced liquidity and higher capital levels to protect the financial system in general. APRA introduced an enhanced Basel II called Basel 2.5 with new provisions that were difficult for Australian Fis to meet in the short term. Basel II set targets that were corresponding with the risk profile and environment in an endeavour to protect solvency of individual Fis whereas Basel III introduced liquidity and higher capital levels to protect the financial system in general. D. Basel III changes to capital requirements require higher secondary capital levels to be held by Fis. C. Page 12 of 17