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A column in the Wall Street Journal by the governor of the central bank of Sweden discussing the Basel accord makes the following observation: One

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A column in the Wall Street Journal by the governor of the central bank of Sweden discussing the Basel accord makes the following observation: "One clear lesson from the financial crisis is that regulatory capital requirements for the banking system were too low. In other words, leverage was too high Source: Stefan Ingves, "Basel ils Simple and stronger Wall Street Journal, October 14, 2012 Which of the following are true regarding regulatory capital requirements"? (Check all that apply) A The top capital measure that includes shareholder equity, is called class A capital 2. The measure of a bank's capital relative to ds risk-adjusted assets is a called a leverage ratio. C. The International agreement on bank capital requirements is called the Basel accord D. Capital requirements dictate the amount of liquid assets a bank must hold relative to what has been lent out E Banks that hold more than the minimum levels of capital are forced to close by regulators Since the leverage ratio equals a bank's capital divided by en total deposits the leverage rado rines on the bank holds more deposits Being leveraged to high means that a bank is _this impacts financial crisis since banks that are leveraged too highly are more likely to O A not holding adequate capital as a cushion against losses relative to tassels: be able to loan to other banks that might get into trouble during the crisis because their loverage ratios were too low, OB. not holding adequate capital as a cushion against fosses relative to ts assefal there are substantial defaults on their loans since the level of total assets will fail below to stabiles C too much capital relative to its total assets fail if there are substantial defaults on their loans since the level of total assets will fall below total abilities OD, too much capital relative to its total assets survive a financial crisis since they planned ahead and increased their leverage ratio to protect against unexpected defaults on loans

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