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Which of the following is not one of the 'three pillars' specified in the Basel accord:
Suggested Answer: B
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Extreme value theory focuses on the extreme and rare events, and in the case of VaR calculations, it is focused on the right tail of the loss distribution. In very simple and non-technical terms, EVT says the following:
1. Pull a number of large iid random samples from the population,
2. For each sample, find the maximum,
3. Then the distribution of these maximum values will follow a Generalized Extreme Value distribution.
(In some ways, it is parallel to the central limit theorem which says that the the mean of a large number of random samples pulled from any population follows a normal distribution, regardless of the distribution of the underlying population.)
Generalized Extreme Value (GEV) distributions have three parameters: (shape parameter), (location parameter) and (scale parameter). Based upon the value of , a GEV distribution may either be a Frechet, Weibull or a Gumbel. These are the only three types of extreme value distributions.
39 comments · newest first
MA
Margurite
10 months ago
Wait, are we sure about that? I thought it was included somewhere.
HA
Haley
11 months ago
100% agree, National Regulation isn’t one of them.
SH
Shonda
11 months ago
I thought National Regulation was part of it. Surprised to learn it’s not!
CL
Clay
11 months ago
Definitely not National Regulation!
MA
Malcom
11 months ago
The three pillars are actually Minimum Capital Requirements, Supervisory Review, and Market Discipline.
AL
Alaine
12 months ago
I’m a bit confused; I thought "Supervisory review" was part of it, but now I'm second-guessing myself on "Market discipline."
AL
Aleshia
12 months ago
I feel like "Minimum capital requirements" is definitely one of the pillars, but I can't recall the others clearly.
MO
Monroe
12 months ago
I remember practicing a question similar to this, and I think "National regulation" isn't one of the pillars.
ST
Stacey
1 year ago
I think the three pillars are related to capital, supervision, and market discipline, but I'm not sure about the exact terms.
LE
Lera
1 year ago
I'm confident that the three pillars are minimum capital requirements, supervisory review, and market discipline. So the answer that is not a pillar is C, national regulation.
EM
Emilio
1 year ago
Ah, I've got it! The three pillars are minimum capital requirements, supervisory review, and market discipline. So the answer that is not one of the pillars is C, national regulation.
OL
Olene
1 year ago
I'm a bit unsure about this one. The three pillars are something I've studied, but I can't quite remember them all. I'll have to think it through carefully.
CH
Chanel
1 year ago
Okay, let's see... I know the three pillars are minimum capital requirements, supervisory review, and market discipline. So the answer must be C, national regulation.
NI
Nieves
1 year ago
Hmm, this seems straightforward. I'll need to recall the three pillars of the Basel accord to determine which one is not listed.
FR
Franchesca
1 year ago
The Cisco NX-OS SDK seems like it could be useful for verifying the code, but I'm not sure if that's the best choice here. I'll have to think this through a bit more.
LU
Lura
1 year ago
Hmm, this seems straightforward. I'll read through the options carefully and think about the context provided in the question.
LO
Lorrine
1 year ago
This seems like a straightforward question. I'll focus on creating the purchase agreement with the key details - the quantity, price, and expiration date.
VA
Vallie
1 year ago
Tricky question - gotta match the correct calculation method to each specific index. Don't panic, work methodically.
OL
Olive
1 year ago
National regulation? That's a good one! I'm going to have to remember that joke for the next finance mixer I attend.
JE
Jess
1 year ago
Minimum capital requirements
DE
Dexter
1 year ago
National regulation
CR
Craig
1 year ago
Supervisory review
WE
Wenona
1 year ago
Market discipline
NI
Nieves
1 year ago
Ugh, these banking regulations always confuse me. I'm going to guess B) Supervisory review, but I'm not totally confident.
PE
Pearlie
1 year ago
D) Minimum capital requirements
RO
Roselle
1 year ago
C) National regulation
KE
Kelvin
1 year ago
B) Supervisory review
MA
Malcolm
1 year ago
A) Market discipline
RO
Rolande
1 year ago
Haha, I hope the exam doesn't have any trick questions like this one. I'm going with D) Minimum capital requirements as the odd one out.
RE
Reita
1 year ago
User 3: I agree with the original comment, D) Minimum capital requirements seems like the odd one out.
BE
Belen
1 year ago
User 2: I'm going with A) Market discipline.
ME
Merrilee
1 year ago
Yeah, it's more about financial stability rather than the oversight and discipline aspects.
VI
Vincenza
1 year ago
I agree, it's more about how much capital banks need to hold rather than a principle of regulation.
WH
Whitney
1 year ago
User 1: I think it's C) National regulation.
KA
Katy
1 year ago
I think you're right, D) Minimum capital requirements doesn't seem to fit with the other pillars.
SE
Serina
1 year ago
I'm pretty sure the correct answer is C) National regulation. The Basel Accord focuses on international banking standards, not national ones.
GI
Gilma
2 years ago
I'm not sure, but I think it's D) Minimum capital requirements.
MA
Maile
2 years ago
I agree with Luisa, national regulation is not one of the 'three pillars'.
LU
Luisa
2 years ago
I think the answer is C) National regulation.