### Answer to the Question

The primary focus of Basel I was **C. Credit risk**.

### Explanation

Basel I, introduced in 1988 by the Basel Committee on Banking Supervision, was primarily concerned with establishing minimum capital requirements for banks, specifically to cover credit risk. The aim was to enhance the stability of the financial system by ensuring that banks held enough capital to absorb losses from their lending activities. Basel I set out risk-weighted capital ratios that banks needed to maintain, focusing particularly on the risk associated with loans and advances to customers and other financial institutions. The framework emphasized the importance of adequate capital to mitigate credit risk, which is the risk of default on a debt that may arise from a borrower failing to make required payments.

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### Answer to the Question

The primary focus of Basel I was **C. Credit risk**.

### Explanation

Basel I, introduced in 1988 by the Basel Committee on Banking Supervision, was primarily concerned with establishing minimum capital requirements for banks, specifically to cover credit risk. The aim was to enhance the stability of the financial system by ensuring that banks held enough capital to absorb losses from their lending activities. Basel I set out risk-weighted capital ratios that banks needed to maintain, focusing particularly on the risk associated with loans and advances to customers and other financial institutions. The framework emphasized the importance of adequate capital to mitigate credit risk, which is the risk of default on a debt that may arise from a borrower failing to make required payments.

Knowee AI · Accepted Answer

### Answer to the Question

The primary focus of Basel I was **C. Credit risk**.

### Explanation

Basel I, introduced in 1988 by the Basel Committee on Banking Supervision, was primarily concerned with establishing minimum capital requirements for banks, specifically to cover credit risk. The aim was to enhance the stability of the financial system by ensuring that banks held enough capital to absorb losses from their lending activities. Basel I set out risk-weighted capital ratios that banks needed to maintain, focusing particularly on the risk associated with loans and advances to customers and other financial institutions. The framework emphasized the importance of adequate capital to mitigate credit risk, which is the risk of default on a debt that may arise from a borrower failing to make required payments.

What was the primary focus of Basel I? A. Market risk B. Operational risk C. Credit risk D. Liquidity risk

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What was the primary focus of Basel I?

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