After the Basel III agreement is fully implemented, what will be the final total minimum common equity to risk weighted assets (RWA) ratio that will be required of banks?(View your Powerpoint slide carefully and completely)

A.8.5%

B.8.0%

C.4.5%

D.7.0%

E.None of the other responses are correct.

Basel Committee on Banking Supervision Basel III phase-in arrangements BANK FOR INTERNATIONAL SETTLEMENTS (All dates are as of 1 January) Phases 2013 2014 2015 2016 2017 2018 2019 Leverage Ratio Parallel run 1 Jan 2013 - 1 Jan 2017 Migration to Disclosure starts 1 Jan 2015 Pillar 1 Minimum Common Equity Capital Ratio 3.5% 4.05 4.5% 4.5% Capital Conservation Buffer 0.625%% 1.25% 1 875% 2.5% Minimum common equity plus capital conservation buffer 3.5% 4.0% 5.125%% 5.75%% 6.375% 7.0% Capital Phase-in of deductions from CET1* 20% 40 60% 100% 100% Minimum Tier 1 Capital 4.5% 5.5% 6.0% 6.0% Minimum Total Capital 8.0%% 8.0% Minimum Total Capital plus conservation buffer 8.0% 8.625% 9.25% 9.875% 10.59% Capital instruments that no longer qualify as non-core Tier 1 capital or Tier 2 capital Phased out over 10 year horizon beginning 2013 Liquidity Liquidity coverage ratio - minimum requirement 60%% 70% 80% 90% 10095 Introduce Net stable funding ratio minimum * Including amounts exceeding the limit for deferred tax assets (DTAs), mortgage servicing rights (MSRs) and financials. - - transition periods