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The correct answer is: "improve the banking sector`s ability to deal with financial and economic stress and improve risk management."
The Basel III Accord, also known as Basel III, is a set of international banking regulations and standards developed by the Basel Committee on Banking Supervision (BCBS). It was introduced as a response to the global financial crisis of 2008 with the aim of strengthening the banking sector and enhancing its resilience to financial shocks.
Basel III focuses on improving the risk management practices of banks, increasing their capital requirements, and introducing liquidity and leverage ratios. The accord sets guidelines for banks to maintain an adequate level of capital and liquidity to absorb financial stress and mitigate systemic risks. It also aims to promote a more stable and sustainable banking system.
Therefore, the correct statement is that Basel III seeks to improve the banking sector`s ability to deal with financial and economic stress and improve risk management.