As described by Wade, how did the Basel II standard of capital adequacy contribute to the crisis?

a. It marked a shift from external regulation of banks to self-regulation.
b. It encouraged banks to lower capital standards during periods of illiquidity.
c. It lowered the cost of finance for banks in the global south relative to those in the developing world.
d. It required banks to use agencies' risk assessment models but assign their own ratings to market assets.
e. It did not contribute to the crisis but instead pushed a more responsible level of external regulation of banks.


Answer: a

Political Science

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