hard · Frm Part 2 Operational Risk
A regulator is debating between using the Credit-to-GDP gap or a 'Credit Growth' metric as the primary CCyB guide.
What is a key advantage of the Gap over the Growth metric?
- The Gap is a point-in-time (PIT) metric, while growth is through-the-cycle (TTC).
- The Gap ignores the shadow banking system, which simplifies data collection.
- The Gap is easier to calculate because it does not require an HP filter.
- The Gap normalizes credit levels by the size of the economy, preventing a high-growth but low-leverage economy from triggering the buffer prematurely.
Sign up free to see the explanation and track your rank →
More Frm Part 2 Operational Risk practice
- Which of the following describes the 'One Big Loss' principle for heavy-tailed (subexponen
- Under the current Basel Standardized Measurement Approach (SMA) for operational risk, whic
- Which of the following is NOT one of them?
- What is the marginal coefficient for the portion of the BI that exceeds 30 billion euros?
- According to standard regulatory definitions (such as SR 11-7), which three components are
- A material change to a model is most likely to be triggered by which event?
- How long is the historical window required for calculating the average annual operational
- In the Bow-Tie analysis framework, where do 'Preventive Controls' sit relative to the oper