The Second Pillar (Pillar 2) of Basel II is concerned with the supervisory review process. Four key principles of supervisory review are specified. Each of the following is a principle EXCEPT

Group of answer choices

a.Supervisors should discourage banks from operating above the minimum regulatory capital limits because this tends to be associated with regulatory arbitrage

b.Supervisors should review and evaluate banks' internal capital adequacy assessments and strategies, as well as their ability to monitor and ensure compliance with regulatory capital ratios. Supervisors should take appropriate supervisory action if they are not satisfied with the result of this process.

c.Supervisors should seek to intervene at an early stage to prevent capital from falling below the minimum levels required to support the risk characteristics of a particular bank and should require rapid remedial action if capital is not maintained or restored.

d.Banks should have a process for assessing their overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital levels.