Question map
Basel III Accord' or simply 'Basel III', often seen in the news, seeks to
Explanation
Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09.[1] The measures aim to strengthen the regulation, supervision and risk management of banks.[1] The main objectives of Basel III are to improve the banking sector's ability to absorb shocks arising from financial and economic stress, improve risk management and governance, and strengthen banks' transparency and disclosure.[2]
Option B correctly captures the essence of Basel III, which focuses on improving the banking sector's resilience to financial stress and enhancing risk management. The other options are incorrect as they relate to entirely different international agreements: Option A refers to the Convention on Biological Diversity, Option C relates to climate change protocols like the Kyoto Protocol, and Option D pertains to the Montreal Protocol on ozone-depleting substances.
Sources- [1] https://www.bis.org/bcbs/basel3.htm
- [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
PROVENANCE & STUDY PATTERN
Guest previewThis is a classic 'Sitter' found in every standard Economy textbook (Vivek Singh, Ramesh Singh). The difficulty is artificially lowered because the distractors are from completely different subjects (Environment), making elimination easy if you simply know Basel = Banking.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: Does the Basel III Accord aim to develop national strategies for the conservation and sustainable use of biological diversity?
- Statement 2: Does the Basel III Accord aim to improve the banking sector's ability to deal with financial and economic stress and improve risk management?
- Statement 3: Does the Basel III Accord aim to reduce greenhouse gas emissions and place a heavier burden on developed countries?
- Statement 4: Does the Basel III Accord aim to transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals?
- Explicitly describes Basel III as an international regulatory framework for banks.
- States the measures aim to strengthen regulation, supervision and risk management of banks — a financial stability objective, not environmental or biodiversity policy.
- Frames the Accord as a comprehensive set of reforms to enhance stability and resilience of the global financial system.
- Specifies aims are strengthening regulation, supervision and risk management within the banking sector, with no mention of biodiversity or national conservation strategies.
- Describes Basel III as a set of financial reforms aimed at strengthening regulation, supervision and risk management in the banking industry.
- Focuses on banks' ability to handle financial stress and improve transparency — again a financial/regulatory remit, not biodiversity or conservation.
Defines Basel III as banking regulations focused on capital, leverage, funding and liquidity to make the banking system more resilient.
A student could note the subject-matter (banking regulation) and use basic domain knowledge to judge that biodiversity strategy-making is outside typical Basel III objectives.
Describes Strategic Goal A: integrating biodiversity into national and local development and planning—an explicit formulation of 'national strategies' for biodiversity.
One could infer that national biodiversity strategies are driven by environmental frameworks (not financial accords) and check whether Basel III is such a framework.
States the core objectives for conservation and sustainable use of biodiversity and mentions institutional mechanisms for implementation.
A student can extend this to expect specialized biodiversity laws/institutions to develop national strategies, contrasting them with banking accords like Basel III.
Lists functions of the National Biodiversity Authority, including advising the central government on conservation and sustainable use—showing which bodies produce national strategies.
Use this to reason that national biodiversity strategies are within the remit of biodiversity authorities rather than international banking accords.
Shows a multiple-choice item that (incorrectly) includes 'develop national strategies for conservation of biological diversity' as an option for 'Basel-III Accord', highlighting a potential confusion of domains.
A student could treat this as an example of a distractor and combine it with the Basel III description (snippet 5) to suspect the option is wrong and verify via domain comparison.
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This statement analysis shows book citations, web sources and indirect clues. The first statement (S1) is open for preview.
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This statement analysis shows book citations, web sources and indirect clues. The first statement (S1) is open for preview.
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