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The capital conservation buffer:

A) Will provide an extra 2.5% Common Equity Tier 1 capital buffer in times of stress.

B) Will be used exclusively to protect banks from the losses garnered from OTC derivatives trading.

C) Is required only for banks with inadequate liquidity coverage and net stable funding source ratios.

D) Is covered in the increased Common Equity Tier 1 capital to risk-weighted assets ratio that will increase to 4.5% from the current 2% over the next few years.


答案：A

解析：The capital conservation buffer is intended to provide an extra cushion against loss in times of stress. It is 2.5% Common Equity Tier 1 capital to risk-weighted assets, which in effect increases the total Common Equity Tier 1 capital ratio to 7%.

Which is true about the capital conservation buffer?

A) When a bank’s capital levels fall within this range,the bank can continue to conduct (operate) business

B) When a bank’s capital levels fall within this range, the bank is constrained (restricted) with respect to dividends, share buybacks,and discretionary bonus payments to staff

C) When a bank’s capital levels fall within this range, the bank is “severely restricted” with respect to conducting business (operations)

D) The bank can elect to draw down the buffer in normal times if competitive demands warrant, including the need to maintain market share

答案：B

解析： When a bank’s capital levels fall within this range, the bank is constrained (restricted) with respect to dividends, share buybacks, and discretionary bonus payments to staff In regard to (A), (C) and (D), each are false.