QUESTION 16 What is a negative side effect of the minimum capital requirements imposed by Basel? A. Possible removal of bank license if requirements are failed. B. The risk-weight assets calculation discriminates between asset classes. C. CET1 can be used to meet all minimum requirements. D. The requirements amplify the economic cycle. E. Banks are required to hold more capital if they hold risky assets. QUESTION 17 Ordinary shares on issue are good quality capital because A. they can decrease when an asset is written off. B. shareholders are required to provide additional funds to the bank when the bank makes a loss. C. the bank has no commitment to pay dividends and can boost retained profits instead. D. they have brought funds to the bank. OE. they use the credit rating of the bank