CISSP Question of the Week: Pillar of Basel II

The correct answer is D.

The Minimum Capital Requirements pillar of Basel II determines the lowest amount of funds that a financial institute keeps in hand.

Basel II is an accord that went into effect in 2006. This accord affects financial institutions. Its three main pillars are as follows:

• Minimum Capital Requirements — determines the lowest amount of funds that a financial institute must keep in hand.
• Supervision — ensures oversight and review of risks and security measures.
• Market Discipline — requests members to disclose risk exposure and to validate market capital.